Exports of goods made from duty free material under Notification No. 32/97 – whether benefit of Notification No. 32/97 available simultaneously with the DEPB benefit on export?

PJ/Case Laws/2011-12/1442

Case: M/s LEATHER CRAFTS (IND P LTD Vs COMMISSIONER OF CUSTOMS, CHENNAI

Citation: 2011-TIOL-1503-CESTAT-MAD

Issue:- Exports of goods made from duty free material under Notification No. 32/97 – whether benefit of Notification No. 32/97 available simultaneously with the DEPB benefit on export?

Brief Facts:- Assessees imported 'Black fabric Lining material in terms of Notification No. 32/97-Cus dated 01.04.1997 and used it in the manufacture of 'Leather spect cases' (leather slip cases'). They claimed DEPB benefit on some shipping bills and due to availment of DEPB, the benefit under the notification above mentioned was sought to be denied as it was held that simultaneous benefit of exemption under Notification No. 32/97 as well as under DEPB was not legally permissible. The further ground for denial was that the assessees had not fulfilled the conditions specified in the Notification regarding achievement of required value addition of at least 10%.

Hence, this appeal filed before the Tribunal.

Reasoning of Judgment:- The Tribunal found that in the case of M/s. Sierra Trading (P) Ltd. and Another[2011-TIOL-758-CESTAT-MAD] in the case of import of 'shoe soles' for the purpose of manufacture of 'men shoes', the benefit of notification claimed by the importers has been extended. The Bench held that if at all benefit of drawback/DEPB could be denied to the importers, if they are jobbing and exports made using such imports but the benefit of the Notification is admissible subject to their having fulfilled the condition of achievement of value addition.

In the present case, the Tribunal noted that although the assessees has vehemently contended that the value addition has been achieved, but the material on record does not establishes the above fact. Moreover, as pointed out by Revenue, the shipping bill filed by the assessees does not contain any reference to the imports and value addition in terms of Notification No. 32/97.

Following the ratio of the Sierra Trading (P) Ltd, the Tribunal set aside the impugned order holding that the appellants are eligible to avail benefit of Notification No. 32/97 subject to their satisfying the Authorities that they have achieved the value addition as required in terms of the notification.

Decision:- Appeal Allowed.

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PJ/Case Laws/2011-12/1442

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