Failure to Examine issue of Customs Duty Exemption Benefit: CESTAT remands matter [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), remanded matter as there was failure to examine issue of customs duty exemption.

The issue which arises for consideration here is whether the goods removed from SEZ to DTA (initially procured from DTA) are chargeable to customs duties in terms of section 30 of SEZ Act, 2005 read with rule 47 of SEZ Rules, 2006.

The basic submission of the appellant is that in terms of rule 48 (3) of the SEZ Rules, 2006 if the goods procured from DTA are cleared back to DTA by SEZ unit without undertaking any manufacturing activity, such goods shall be treated as re-import and the said rule postulates deeming fiction with regard to non-leviability of basic customs duty on the re-imported goods.

The revenue on the other hand relied on the findings of the authorities below referring tothe provisions of rule 47 of SEZ Rules read with section 30 of SEZ Act to say that any goods removed from SEZ to DTA are chargeable to Customs duties.

A Single Bench of Binu Tamta, Judicial Member observed that “The appellant has raised the contention that he has been wrongly denied the benefit of the exemption Notification No. 45/2017-Cus., which provides different levels / measures of exemption benefits to the re-imported goods depending upon which export benefits, like duty drawback, rebate etc., were availed and subject to several conditions. It is observed that it has been dispatched on payment of Central Excise duty and drawback too have been claimed, however, the appellate authority has failed to examine the issue of exemption benefit under the said notification in detail, giving specific reasons.”

“I am therefore, of the opinion that the matter needs to be remanded on the applicability of the exemption notification and whether the appellant is entitle to any benefit in terms thereof. I, therefore, partly dismiss the appeal and remand the matter on the limited issue as referred above” the Tribunal noted.

To Read the full text of the Order CLICK HERE

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