The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the goods sent out of India on an approval basis do Attract Integrated Goods and Service Tax (IGST) at the time of re-import.
Heeralal Chhaganlal Tank, the appellant assessee are jewelers holding Import and Export Code and the importer-assessee had filed 10 Bills of Entry for the re-import of goods exported earlier for participation in an exhibition or on a consignment basis. While re-importing these goods, the assessee-importer was exempted from Customs Duty, and the goods were exported either under claim of refund of IGST paid on export or under bond without payment of duty of IGST.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand of Customs Duty amounting to Rs.1,20,17,423/- was proposed to be recovered from the assessee along with penalty and the goods imported by the said bill of entry were proposed to be confiscated.
Rahul Lakhwani, the counsel for the assessee contended that the assessee had rightly availed exemption notification while re-importing goods that were exported for exhibition, the penalty cannot be imposed upon the assessee otherwise Also the issue herein was the outcome of the disputed interpretation of notification and a penalty was not imposable upon the assessee in said circumstance.
M.K. Chawda, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was liable to pay the demand and the re-import contained the supply of goods.
The Bench observed that the goods sent out of India on an approval basis do not attract integrated tax at the time of re-import, the amount stands already paid, otherwise. The goods exported are admittedly imported within six months of the export then there was no liability to pay tax on re-import.
The two-member bench comprising Rachana Gupta (Judicial) and Hemambika Priya (Technical) quashed the Customs duty demand raised by the department.
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