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PJ/Case Law/2013-14/1955

Whether assessee can claim exemption under different notification at appellate stage?

Case:- LEE-ZA INTERNATIONAL Vs COMMISSIONER OF C. EX., MEERUT-II

Citation:- 2013 (294) E.L.T. 424 (Tri. - Del.)

Brief facts:- The appellant was an exporter of handicrafts. They imported PVC tray for packing the handicrafts, claiming exemption under Notification No. 21/2002-Cus., dated 1-3-2002. Serial No. 114 of the said notification grants exemption to “poly film used for shrink wrapping and cling wrapping of Art ware.”
The lower authorities had denied the exemption by observing that PVC tray imported by the appellant could not be considered to poly film used for shrink wrapping and cling wrapping of Art ware.
 
Appellant’s contentions:- Learned Advocate appearing for the appellant during the course of hearing fairly admitted that PVC trays were not in the shape of Poly films and description against serial No. 114(i) of the notification had not stood fulfilled by the importer. However, he shifted his claim and claimed the benefit of Notification No. 104/94-Cus., dated 16-3-1994. The said notification provided exemption to containers of durable nature subject to importer to execute a bond binding himself to re-export the said containers within six months from the date of their importation. Learned Advocate fairly admitted that the claim of benefit of said notification was not advanced either before the adjudicating authority or before the first appellate authority. He submitted that this being a legal issue, the appellant may be permitted to raise the same at this stage.
 
Respondent’s contentions:- Countering the arguments, learned DR appearing for the Revenue opposed the prayer of the learned Advocate that Notification No. 104/94-Cus., dated 16-3-1994 granted exemption subject to fulfillment of certain procedure like execution of bond, etc., and the appellant having not fulfilled the procedural requirement, the claim of the appellant at this belated stage should not be entertained. He also submitted that the notification required export of very same goods within six months from the date of their importation and it could not be established at this late stage as to whether the exported goods were the very same goods which were imported by the appellant. Learned DR submitted that in any case, the claim under the said notification No. 104/94-Cus. having not been placed before the lower authorities, their opinion on the said notification being not available, the matter should be remanded, if the appellants were permitted to raise the above legal issue.
In his rejoinder, the learned Advocate submitted that fact of export of the very same goods had already been raised before the original adjudicating authority. As such, as the facts were available on record it was only a legal claim of the notification which was now being raised for the first time.
 
Reasoning of judgment:- After appreciating the submissions, the Bench agreed with the learned DR that this claim was not made before the authorities below. However, they felt that the same was the alternative claim of exemption for another notification, which was available at the time of import of the goods. They further noted that there were procedural requirements for execution of bond at the time of import of the goods. However, they felt that such requirement of execution of bond was primarily to ensure the re-export of the goods within six months from the date of importation or within the period further extended by the jurisdictional Assistant Commissioner. If the appellant was in a position to establish export of said goods within six months from the date of importation from other collateral evidence, they were of the view that the benefit of notification should be made available to the assessee. However, as observed earlier the claim of the appellant did not stand examined by the lower authorities. However, the facts of export of the very same goods, which were imported by the appellant had to be established and identity of the imported and re-exported goods was required to be examined by the lower authorities, they set aside the impugned order and remand the matter to the adjudicating authority for examining the appellant’s claim of exemption of Notification No. 104/94-Cus., dated 16-3-1994. They made it clear that the original claim of the appellant under Notification No. 21/2002-Cus., dated 1-3-2002 stood rejected by them.
 
Decision:-Appeal disposed off.

Comment:- The analogy drawn from the case is that the appellant may claim the benefit of different exemption notification at the appellate stage also if they are in a position to establish with evidence that they are eligible to avail the benefit of the said exemption notification and that the conditions of the said exemption notification would be satisfied by them. 

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