Judgment:
1. This appeal is directed against the Order-in-Appeal No.PPM/1780/B-1-475/85 of the Collector of Central Excise (Appeals), Bombay confirming the duty demand for Rs. 10,085.25.
2. The Appellants cleared 14 cases of Steel Safes and Strong Boxes under AR 4 form, on 1-8-1975 without payment of duty by executing B-I Bond. The said goods were loaded on Board a Vessel for being exported.
After the Vessel left Bombay Port on 30-8-1975, it caught fire and hence was brought back to Bombay Port and the Voyage was abandoned. The consignment including the said consignment were off loaded, which were taken as re-landing and customs duty was charged vide Section 20 of the Customs Act, which was paid. The Excise Department however, issued Show Cause cum-Demand Notices, demanding duty of Rs. 10,085.25 or to produce Certificate for due export. The Appellant pleaded that the return of the goods was treated as re-import and accordingly, Customs duty was charged and hence, export having been deemed to have been caused, the requirement of B-I Bond were complied with and hence, there was no case for demanding excise duty. The contention was negatived and duty demand was confirmed. In the Appeal before the Collector (Appeals), the said demand stood confirmed.
3. Mr. R.J. Parekh, the ld. Advocate has pleaded that as per the Customs Act, they have paid the duty and as such, the export and re-import has already been effected and by demanding excise duty, there would be double taxation. He has also referred to the provisions contained in Section 20 of the Customs Act.
4. Mr. S.V. Singh, the ld. J.D.R. has however, pleaded that as per B-I Bond executed, proof of due export was required, which having not been produced, the Appellants became liable to pay the excise duty.
5. Considering the submissions and going through the records there does not appear any dispute as to the factual position. There is no dispute that the Customs Duty payable vide Section 20 of the Customs is paid.
6. Supreme Court have in Collector v. Sun Exports -1988 (35) E.L.T. 241 (S.C.), held that once the goods go out of Indian Territorial Water, export is complete.
7. The Customs Department have charged import duty on the subject goods, indicating that on due investigation, they have ascertained that the goods were taken out of Indian Territorial Water, resulting in export of goods, as has been held by the Supreme Court in the said judgment.
8. Section 20 of the Customs Act, 1962 (as it then existed) makes special provisions when the goods manufactured in India are duly exported and re-imported and provides that they would be subject to same terms and conditions as are applicable to the goods of foreign origin. Proviso to Sub-section (1) of Section 20 is however, added to provide that if the goods are imported within 3 years after export, then, the Customs Duty equal to the Excise duty chargeable or drawback claimed should be charged. Clause (c) in the said proviso specifically provides for the goods exported under Bond without payment of duty and lays down, amongst others, that the Customs duty chargeable should be equal to excise duty leviable. The present case stands covered under Clause (c) (iii) in the said proviso.
9. When the customs duty has been collected vide proviso to Section 20(1) of the Customs Act, taking the export having already been effected and bring back of the goods tantamount to importation, there is no cause to allege that exportation had not taken place and hence, excise duty was chargeable. The ground raised gets its clear answer in the judgment of the Supreme Court referred to above.
10. Raising the demand for the excise duty therefore, does not appear justified and cannot be sustained. The order of the authority below therefore cannot be sustained and is set aside.