Permission for re-export of machinery parts imported for jobwork purpose

PJ/Case Laws/2011-12/1349

Case: Craftsman Automation Pvt. Ltd. versus Commissioner of Customs

Citation: 2011 (271) ELT 554 (Tri. – Chennai)

Issue:- Re-export of parts of machinery imported earlier for undertaking jobwork – re-export sought as supplier not wanting to continue the work and demanded return of goods – whether permission can be denied?

Brief Facts:- Appellants imported parts of printing machinery from M/s. Beijing Mitsubishi Heavy Industries Beiren Printing Machinery Co. Ltd., China in the month of August 2008. They had imported the same for the purpose of undertaking job work. They have undertaken job work using some quantity of the parts imported and exported the resultant sub-assemblies to the above mentioned supplier in China. It is claimed that due to slow down in economic activities the supplier did not want further job work to be done by the appellant and asked for return of the balance of imported parts as such. The appellants made the request for re-export for balance of goods received by them which was rejected by the Commissioner.

Hence, appellant is before the Tribunal.

Appellant’s Contention:- Appellant contended that the goods were imported only for the purpose of job work; that they are not the owners of the goods; that as the supplier has chosen not to continue the work and sought for the return of the balance of the goods, they were under the obligation to return the goods as such. He relies on the decision of the Tribunal in the case of Kerala Hi- Tech Industries Ltd. v. CCE, Cochin [2001 (132) E.L.T. 593] wherein re-export of goods imported in similar circumstances was permitted. Appellant also relies on the decision of the Tribunal in the case of Also Marine & Harvests Ltd. v. CC, Cochin [2007 (216) E.L.T. 405] and submits that the law does not expect anything which is impossible to be done in their case, as the goods belong to the supplier and they do not want the job work to be done, it becomes inevitable on their part to return the balance goods and keeping the goods by them has become impossible. Appellant also relied on Para 2.35 of the Foreign Trade Policy which permits re-export of imported goods in the same or substantially in the same form provided that the item to be imported or exported is not restricted for import or export.

Respondent’s Contention:- Revenue submitted that the condition of the notification for re-export is not fulfilled.

Reasoning of Judgment:- The Tribunal noted that Notification No. 93/2004 permits "where the materials are found defective or unfit for use, the said materials may be re-exported back to the foreign supplier within three years from the date of payment of duty on the importation thereof, provided that at the time of re-export the materials are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, as the materials which were imported."

It was held that the reasoning given by the Commissioner is that the appellants have used part of the imported consignments for manufacturing the sub-assemblies and exported and therefore the remaining parts cannot be held to be defective or unfit for use. There is no doubt that the goods cannot be treated as unfit for use. However, it is the case where the supplier has not permitted the appellants to use any further.

It was held that it is not as if no permission is being granted by the customs authorities for re-export of the imported goods. The Foreign Trade Policy (Para 2.35) permits re-export of imported goods provided there is no restriction on the import and the export. For example, in cases of wrong supply re-export is being permitted. Even in cases of mis-declaration, the request for re-export is being considered after subjecting the goods to adjudication for the offence of mis-declaration.

The Tribunal held that in the present case it has not been alleged that there is any restriction on the import of the goods or for export of the same goods. If duty has been paid at the time of import, the re-export as such has to be governed by the provisions of Section 74 of the Customs Act, 1962 on the quantum of drawback.

In the present case, the goods have been imported duty-free i.e. subject to nil assessment. The appellants are only asking for re-export of the goods in the circumstances mentioned above. The reasoning adopted by the Commissioner for rejecting re-export cannot be appreciated. It is not the case that the condition of the notification has been violated and therefore the Commissioner has held the goods to be liable for confiscation or has demanded any duty. Therefore, the order of the Commissioner rejecting the request for re-export cannot be sustained. The same is set aside. The Commissioner shall allow re-export subject to the appellants proving that the goods sought to be exported are the same as the goods which were imported.

Decision:- Appeal allowed.

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PJ/Case Laws/2011-12/1349

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