At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Bangalore
By, HONOURABLE MR. P.G. CHACKO
By, MEMBER (JUDICIAL) & HONOURABLE MR. M. VEERAIYAN
By, MEMBER (TECHNICAL)
For the Appellant : P.R. Venkatesh, Advocate. For the Respondent : Ravi Chander, Superintendent (AR) for the Revenue.
This appeal filed by the assessee is against a demand of duty amounting to Rs.8,67,937/- on goods declared as ‘snap buttons’, imported during August and September, 2005. The demand arises out of denial of the benefit of Notification No.21/2002-Cus. Dt. 01/03/2002 (Sl.No.140). The importer(appellant) claimed the benefit of the Notification, which prescribed ‘nil’ rate of duty for the items mentioned at Sl.No.140 thereof on condition that the same would be used in the manufacture of goods to be exported. The lower authorities denied the benefit on the ground that the goods imported by the appellant and covered by the relevant Bills of Entry were not snap buttons but only parts thereof. As a matter of fact, the appellant claims to have imported, from the same source, parts of snap buttons (snap fasteners) contemporaneously and to have used snap buttons/fasteners in baby’s garments and exported these garments. The lower authorities took the view that the parts of buttons imported separately, though contemporaneously, could not be equated to buttons and therefore the benefit of the Notification was not liable to be granted. As against this, the learned counsel for the appellant submits that a similar issue was considered by this Bench and the benefit of the Notification was granted. In this connection, he has cited Final Order No.673/2009 dt. 18/03/2009 passed by this Bench in appeal No.C/281/2008. It is also pointed out that the Tribunal’s order was affirmed by the Hon’ble High Court of Karnataka in Customs Appeal No.3 of 2010 filed by the Department and further that a Special Leave Petition filed by the Department against the High Court’s judgment was dismissed by the apex court.
2. On a perusal of the order passed by this Bench, we note that the Bench found that the importer had fulfilled the condition attached to Sl.No.140 of Notification No.21/2002-Cus. ibid. The Bench also noted that the bond executed by the party at the time of the import had been honoured by them and, on that basis, the finding of fulfillment of the said condition of the Notification was recorded. In the present case, however, we have not found anything on record indicating that the appellant fulfilled the condition of the Notification through a similar bond or otherwise. In the orders of the lower authorities, it appears, this aspect was not adverted to. As the claim for exemption under the Notification would invariably depend on whether the relevant conditions were complied with by the importer, we are presently not in a position to allow this appeal on the facts of this case. The decision cited by the learned counsel is based on a clear finding of the condition attached to the Notification having been fulfilled by the importer. There is no similar finding recorded by the lower authorities, nor is there any evidence adduced by the appellant before us to establish the claim of compliance with the conditions of the Notification. In this scenario, we have to remand the case to the original authority to do the needful.
3. We set aside the impugned order and allow this appeal by way of remand with a direction to the original authority to take fresh decision on the assessee’s claim of exemption under Notification No.21/2002-Cus. (Sl.No.140) after giving them a reasonable opportunity of adducing evidence with regard to the requirement of compliance with the relevant conditions. Needless to say that a reasonable opportunity of being heard also should be given to the party. We make
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it clear that, if the party succeeds in establishing that they used the imported goods in the manufacture of baby’s garments and exported the garments in compliance with the relevant conditions attached to the Notification, they can certainly claim the benefit of exemption in view of the decisions cited by the learned counsel. 4. The appeal stands allowed by way of remand as above.