# COMMISSIONER OF CUSTOMS, CALCUTTA v. INDIAN RAYON & INDUSTRIES LTD

- **Citation:** [2008] 10 S.C.R. 1050
- **Court:** Supreme Court of India
- **Decided:** 2008-07-16
- **Case number:** Civil Appeal No. 8371 of 2002
- **Bench:** Ashok Bhan, Dalveer Bhandari
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-customs-calcutta-v-indian-rayon-industries-ltd-23358
- **Pages:** 13

## Headnote

Customs Act, 1962; s. 20 and Exemption Notification
Nos. 158195-Cus. dated Nov. 14, 1995 and 94196-Cus. dated
c Dec. 16, 1996 issued thereunder:
Exemption Notifications - Applicability of, on re-importation of goods - Held: In terms of Notification No. 158195Cus. assessee to undertake re-exporting of the goods within
specified time limit else it would be liable to pay the difference
D between duty levied at the time of re-import and the duty leviable at the time of importation of such goods - Assessee executed three separate bonds in respect of three bills of entry
at the time of re-importing such goods - Assessee can not
approbate and re-probate on the ground that benefit under
E another notification is also available to him or otherwise - In
any event, in the facts and circumstances· of the case, Notification No. 94196-Cus. Not applicable.
'DEEG Scheme' and 'DEPB Scheme' - Distinction between in the context of applicability of Exemption Notification
F Nos. 158195 and 94196 while re-importing the goods.
).
Assessee industries exported the goods in question,
which were rejected by a foreign buyer. It claimed the benefit of Notification No. 158/95-Cus. undertaking re-importG ing of the goods by executing three bonds in connection
thereto. However, it could not re-export the goods. The
authorities issued Show-Cause Notices for realization of
the amount guaranteed by the assessee under the bonds.
At that stage, it claimed benefit of another Notification No.
·-
.~---.
H
1050
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
1051
,,.
~
~
RAYON & INDUSTRIES LTD.
94/96-Cus .. dated December 16, 1996. The authorities conA
firmed the demand in respect of two bills of Entry. However, it allowed the benefit of the Exemption Notification
No. 94/96-Cus. in respect of third bill of Entry as the goods
under the said bill were re-exported under the Incentive
_.J -!
Scheme. The assessee filed an appeal, which was alB
lowed by the Tribunal. Hence the present appeal.
Allowing the appeal, the Court
HELD: 1.1 By Notification No. 158/95-Cus. dated 14th
November, 1995, goods manufactured in India and re-im- c
ported in India for repairs or for re-conditioning are exempted from whole of the duty of customs leviable on
. them as well as additional duty subject to the condition,
inter a/ia, that the goods are re-exported within six months
of the date of re-importation or any extended period as
D
fmay be allowed and a bond is executed at the time of importation to export within the said period and, in the event
of failure to do so, pay an amount equal to the difference
between the duty levied at the time of re-import and the
duty leviable on such goods at the time of importation. E
(Para - 11) [1055 G-H, 1056 A]
1.2 In respect of each of the Bills of Entry, separate
bonds were executed by the assessee in~icating Bill of
Entry No., description of goods, country of origin, CIF
Value, the assessable value and the bond value. (Para -
F
11) [1056-C]
2.1 The only Notification which was available to the
assessee at the time of import which granted the assessee the right to import duty free goods was Notification
No. 158/95-Cus. Having availed of the benefit of notificaG
tion, the assessee has necessarily to comply with the
• --r
conditions of the notification. It goes without saying that
the assessee cannot approbate and reprobate. (Para -
13) [1056 E-F]
H
1052
SUPREME COURT REPORTS
[2008] 10 S.C.R.
'f . "
A
Tractors and Farm Equipment Ltd. v. Collector of Customs, Madras, (1998) 9 SCC 665 - referred to.
2.2 Though, there is no estoppel against the law but
having sought for and taken the benefit of the notifica8
ti on to import goods without payment of duty, it is not open
"';-- -".-...-
to the assessee to contend that the conditions in the said
l
notification need not be fulfilled, be it on the ground that
the benefit under another notification is available to him
or otherwise. In any event, Notification No. 94/96-Cus. is,
c
on its own terms, not applicable to the facts

## Text

A
B
[2008] 10 S.C.R. 1050
COMMISSIONER OF CUSTOMS, CALCUTTA
v.
INDIAN RAYON & INDUSTRIES LTD.
(Civil Appeal No. 8371 of 2002)
JULY 16, 2008
[ASHOK BHAN AND DALVEER BHANDARI, JJ.]
Customs Act, 1962; s. 20 and Exemption Notification
Nos. 158195-Cus. dated Nov. 14, 1995 and 94196-Cus. dated
c Dec. 16, 1996 issued thereunder:
Exemption Notifications - Applicability of, on re-importation of goods - Held: In terms of Notification No. 158195Cus. assessee to undertake re-exporting of the goods within
specified time limit else it would be liable to pay the difference
D between duty levied at the time of re-import and the duty leviable at the time of importation of such goods - Assessee executed three separate bonds in respect of three bills of entry
at the time of re-importing such goods - Assessee can not
approbate and re-probate on the ground that benefit under
E another notification is also available to him or otherwise - In
any event, in the facts and circumstances· of the case, Notification No. 94196-Cus. Not applicable.
'DEEG Scheme' and 'DEPB Scheme' - Distinction between in the context of applicability of Exemption Notification
F Nos. 158195 and 94196 while re-importing the goods.
).
Assessee industries exported the goods in question,
which were rejected by a foreign buyer. It claimed the benefit of Notification No. 158/95-Cus. undertaking re-importG ing of the goods by executing three bonds in connection
thereto. However, it could not re-export the goods. The
authorities issued Show-Cause Notices for realization of
the amount guaranteed by the assessee under the bonds.
At that stage, it claimed benefit of another Notification No.
·-
.~---.
H
1050
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
1051
,,.
~
~
RAYON & INDUSTRIES LTD.
94/96-Cus .. dated December 16, 1996. The authorities conA
firmed the demand in respect of two bills of Entry. However, it allowed the benefit of the Exemption Notification
No. 94/96-Cus. in respect of third bill of Entry as the goods
under the said bill were re-exported under the Incentive
_.J -!
Scheme. The assessee filed an appeal, which was alB
lowed by the Tribunal. Hence the present appeal.
Allowing the appeal, the Court
HELD: 1.1 By Notification No. 158/95-Cus. dated 14th
November, 1995, goods manufactured in India and re-im- c
ported in India for repairs or for re-conditioning are exempted from whole of the duty of customs leviable on
. them as well as additional duty subject to the condition,
inter a/ia, that the goods are re-exported within six months
of the date of re-importation or any extended period as
D
fmay be allowed and a bond is executed at the time of importation to export within the said period and, in the event
of failure to do so, pay an amount equal to the difference
between the duty levied at the time of re-import and the
duty leviable on such goods at the time of importation. E
(Para - 11) [1055 G-H, 1056 A]
1.2 In respect of each of the Bills of Entry, separate
bonds were executed by the assessee in~icating Bill of
Entry No., description of goods, country of origin, CIF
Value, the assessable value and the bond value. (Para -
F
11) [1056-C]
2.1 The only Notification which was available to the
assessee at the time of import which granted the assessee the right to import duty free goods was Notification
No. 158/95-Cus. Having availed of the benefit of notificaG
tion, the assessee has necessarily to comply with the
• --r
conditions of the notification. It goes without saying that
the assessee cannot approbate and reprobate. (Para -
13) [1056 E-F]
H
1052
SUPREME COURT REPORTS
[2008] 10 S.C.R.
'f . "
A
Tractors and Farm Equipment Ltd. v. Collector of Customs, Madras, (1998) 9 SCC 665 - referred to.
2.2 Though, there is no estoppel against the law but
having sought for and taken the benefit of the notifica8
ti on to import goods without payment of duty, it is not open
"';-- -".-...-
to the assessee to contend that the conditions in the said
l
notification need not be fulfilled, be it on the ground that
the benefit under another notification is available to him
or otherwise. In any event, Notification No. 94/96-Cus. is,
c
on its own terms, not applicable to the facts of the present
case. (Paras~ 13 & 14) [1056-G-H, 1057 A-B]
2.3 The description of the goods claimed in Serial
No. 1 (e) under Notification No. 94/96-Cus.refers to the
goods exported under DEEC or Export Promotion CapiD tat Goods (EPCG) Scheme and not under DEPB Scheme.
In the present case, out of the three Bills of Entry cover-
--\
ing goods which had to be re-exported, only one of them
was for goods eariier exported under DEEC scheme while
the other two were under DEPB scheme. The adjudicatE ing authority had, in respect of goods initially imported
under DEEC Scheme, given the benefit of the Notification ~o. 94/96-Cus, while rejecting the claim in respect of
the goods exported und~r a DEPB Scheme. (Para - 14)
[1057 B, 1059 C-D]
F
3. Since.the two consignments vide Bills of Entry Nos.
.+-
930 dated 12th August, 1998 and 2440 dated 29th May, 1998
under DEPB Scheme do not get the benefit of Notification
No.94/96-Cus., the order of the Tribunal deserves to be set
aside and the order of the Commissioner of Customs has
G to be restored. Ordered accordingly. (Para - 18) [1062-D]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 8371
•
of 2002
-1From the final Order No. A-1255/KOL/2001 dated 23/11/
H 2001 of the Customs, Excise & Gold (Control) Appellate Tribu-
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
1053
RAYON & INDUSTRIES LTD. [BHAN, J.]
nal, Eastern Bench, Kolkata in Appeal No. C/R-30/2000
A
M. Chandrasekharan, A.S.G., S. Sunil, Kiran Bhardwaj
(For B.V. Bairam Das) for the Appellant.
S. K. Bagaria, D. Bharat Kumar, Anand (for Abhijit
Sengupta) for the Respondent.
B
The Judgment of the Court was delivered by
BHAN, J. 1. The instant appeal has been filed by the Revenue under Section 35L of the Central Excise Act, 1944 against
the final judgment and order No.1-1255/KOL/2001 dated 23rd c
November, 2001 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, Eastern Bench, Kolkata (for short "the
Tribi..mal"), whereby the Tribunal has set aside the order passed
by the Commissioner.
2. The three Bills of Entry which are the bone of contenD
tions in the present case are detailed below:-
(i)
Bill of Entry SI. No. 2256 dated 30th April, 1998, per ·
Vessel X-Press Singapore Voy-257, Rot. No. 258/
98 dated 7th April, 1998, Line No. 97, Country of
origin - India, Goods 135 cartons 2/64 NM Merino
E
Wool 100% Raw White on paper cone, Assessable
Value - Rs.36,63,829/-.
(ii)
Bill of Entry SI. No. 2440 dated 29th May, 1998, per
Vessel S.S. Acacia V. 818, Rot No. 370/98, Line No.
F
154, Country of Origin - India, Goods - 20 pallets
Polyester 100% Semi Dull Ring Spun Yarn for
weaving NE 24/2,
Assessable value -
Rs.16,88,481.23
(iii) Bill of Entry SI. No.930 dated 12th August, 1998 per G
'"> .+-
Vessel Breeze, Rot. No. 549/98, Line No. 26, country
of origin - India, Goods 765 Ctns. of 100% polyester
yarn, Assessable value liable to duty Rs.27,37,954.76.
FACTS:
H
1054
SUPREME COURT REPORTS
[2008] 10 S.C.R.
i
)I
A
3. The goods were initially exported by the responc;Jentassessee, which were rejected by the foreign buyer being defective and the assessee re-imported them back to India.
4. Assessee had initially claimed in the Bills of Entry the
benefit of Notification No. 158/95-Cus and also executed bonds
)-- "'-
B for re-export, as required under the said notification. The Bills
of Entry were assessed provisionally. The assessee could not
re-export the goods due to recessionary conditions in the textile industry. It claimed before the adjudicating authority that since
it was not possible for it to re-export the goods, it may be alc lowed the benefits of another Notification No. 94/96-Cus., which
was in force at the time of the clearance from the factory originally.
5. Three show cause notices were issued in respect of
D the three Bills of Entry for realization of the amounts which were
guaranteed under the bonds executed by the assessee at the
---*
time of importation. The demands under the show cause notices were in terms of Notification No. 158/95-Cus. referred to
above. Confronted with the liability to pay the duty as enjoined
E
under the notification, in view of non re-export of the goods within
six months of the date of re-importation as stipulated, the assessee took the ground before the adjudicating authority that
Notification No. 158/95-Cus. was not in force at the· time of the
importation. Having realized this to be incorrect, the assessee
shifted its stand and submitted that Notification No. 94/96-Cus.
F
dated 16th December, 1996 was applicable to the goods in
question and the benefit thereunder should be given to it.
6. The main contention raised by the assessee was that if
the benefits were available under the two Notifications to the
G assessee, then the assessee could avail of the benefits under
either of them. Revenue's reply to the said contention was that
it was not correct to say that if the two Notifications are appli-
--i-
<
cable, assessee after having opted to take benefit under one of
the Notifications, could change its option and avail the benefit
H
under the other scheme. In any case, this would depend upon
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
1055
• t
RAYON & INDUSTRIES LTD. [BHAN, J.]
the nature and contents of the Notifications. It was revenue's
A
contention that the assessee could not change its option because of the nature and contents of the notifications.
7. The Authority-in-Original confirmed the demand against
>
~
(i) Bill of Entry No. 930 in the sum of Rs.20, 76, 111 /-and (ii) Bill
of Entry No. 2440 in the sum of Rs.13,86,355.24. The assesB
see was given the benefit of Notification No. 94/96-Cus. in respect of Bill of Entry No. 2256 of 1998 as the goods were reexported under Incentive Scheme, i.e., Duty Exemption Entitlement Scheme (DEEC). Thus, in relation to Bill of Entry No. 2256
dated 301h April, 1998, the duty was confirmed in the sum of Rs. c
4,99, 188. 79. The benefit was not extended to other two Bills of
Entry as the goods in these cases were covered under Duty
Entitlement Passbook Scheme (DEPB). Contention raised on
behalf of the assessee that the benefits of the Notification No.
~
94/96-Cus. having been given to the assessee in regard to Bill
D
of Entry No. 2256, could not be denied on Bills of Entry Nos.
930 and 2440, was rejected.
8. The assessee being aggrieved filed an appeal against
the order of the Commissioner, which has been accepted by
E
the Tribunal by its impugned order. The Revenue being aggrieved has filed the present appeal.
9. Counsel for the parties have been heard.
10. Section 20 ofthe Customs Act, 1962, which deals with
re-importation of the goods, provides:-
F
"20. Re-importation of goods. - If goods were imported
into India after exportation therefrom, such goods shall be
liable to duty and be subjected to all the conditions and
restrictions, if any, to which goods of the like kind and G
value are liable or subject, on the importation thereof."
,,
,,,._
11. By Notification No. 158/95-Cus. dated 141h November, 1995, goods manufactured in India and re-imported in India for repairs or for re-conditioning are exempted from whole
of the duty of customs leviable on them as well as additional H
1056
SUPREME COURT REPORTS
[2008] 10 S.C.R.
A
duty subject to the condition, inter alia, that the goods are reexported within six months of the date of re-importation or any
extended period as may be allowed and a bond ·is executed at
the time of importation to export within the said period and, in
the event of failure to do so, pay an amount equal to the differs ence between the duty levied at the time of re-import and the
duty leviable on such goods at the time of importation. The
assessee executed a bond with the President of India, complying with the aforesaid condition of notification and undertook to
pay, on demand in the event of its failure to comply with any of
c the conditions of notification, an amount equal to the difference
between the duty levied and leviable on such goods. In respect
of each of the Bills of Entry, separate ·bonds were executed indicating Bill of Entry No., description of goods, country of origin, CIF Value, the assessable value and the bond value.
D
12. The Revenue contends that the assessee could not
avail the benefit under Notification No.94/96-Cus and that it could
not change its option. According to the assessee, the assessee could change its option even at a later stage and it could
avail of the benefit under Notification No.94/96-Cus which was
E in force at that time.
13. We do not find any substance in this su.bmission advanced on behalf of the assessee. The only notification which
was available to the assessee at the time of import which
granted the assessee the right to import duty free goods was
F
Notification No. 158/95-Cus. Having availed of the benefit of
}-
notification, the assessee has necessarily to comply with the
conditions of the notification. It goes without saying that the assessee cannot approbate and reprobate. In Tractors and Farm
Equipment Ltd. v. Collector of Customs, Madras, [1998 (9)
G SCC 665], it was pointed out by this Court that once the
assessee's case was that what it had imported do not constitute internal combustion piston engines but only certain compo-
~ 4'"
nents, the importer cannot turn around and say that what was
imported constitutes piston engines. Of course, there is no esH toppel against the law but having sought for and taken the ben-
• t
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
1057
RAYON & INDUSTRIES LTD. [BHAN, J.]
efit of the notification to import goods without payment of duty, it A
is not open to the assessee to contend that the conditions in the
said notification need not be fulfilled, be it on the ground that the
benefit under another notification is available to him or otherwise.
14. In any event, Notification No. 94/96-Cus. is, on its own B
terms, not applicable to the facts of the present case. The assessee has claimed the benefit under clause 1 (e) of Notification No. 94/96-Cus. The description of the goods claimed in
Serial No. 1(e) under Notification No. 94/96-Cus., which reads
- - ... - _, __ _
SI. Description of goods
No.
( 1)
(2)
Goods exported-
(a). XXX
(b) . xxx
(c). XXX
(d). xxx
(e) . under duty exemption scheme (DEEC) or
· export Promotion Capita I Goods Scheme
(EPCG)
Amount of duty
(3)
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
Amount to excise duty
leviable at the time and
place of importation of
goods and subject to the
following conditions Applicable for such Goods
(I) DEEC book has not
been finally closed
and export in question is delogged
from DEEC book.
(II) In case of EPCG
scheme the period
of full export performance has not exc
D
E
F
G
H
1058
A
c
D
E.
F
G
H
SUPREME COURT REPORTS
[2008] 10 S.C.R.
pired and necessary
endorsements regarding
reimport
have been made.
Ill) The importer had intimated the details of
the consignment reimported to the Assistant Commissioner of
Central Excise in
charge of the factory
where the goods
were manufactured
and to the licensing
authority regarding
the fact of re-importation and produces a
dated acknowle -
dgement of such intimation at the time of
clearance of goods.
IV) The Manufacture exporters who are registered with Central
Excise Department
may be permitted
clearance of such
goods without payment of Central Excise duty under trans it bond to be executed with the customs
authorities,
1--...
_.
such bond will be cancelled on the production of certificate is-
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
1059
RAYON & INDUSTRIES LTD. [BHAN, J.]
sued by Central ExA
cise authorities about
receipt of re-imported
goods into their faqtory.
B
(2)
xxx
xxx
I
(3)
xxx
xxx
refers to the goods exported under· DEEC or Export c
Promotion Capital Goods (EPCG) Scheme and not under
DEPB Scheme. In the present case, out of the three Bills
of Entry covering goods which had to be re-exported, only
>
one of them. was for goods earlier exported under DEEC
tscheme while the other two were under DEPB scheme. D
The adjudicating authority had, in respect of goods initially
imported under DEEC Scheme, given the benefit of the
Notification No. 94/96-Cus, while rejecting the claim i'n
respect of the goods exported under a DEPB. Scheme.
This is in accordance with the language of Notification E
No. 94/96-Cus. The difference between DEEG and DEPB
Schemes can be seen from the following:-
I
"DEEG Scheme
Under this scheme the importer is issued an Advance F
Licence to procure the raw material for a manufacturer of
the export product. The goods which are cleared unde'r
Advance Licence are meant for use in the manufacture of
export product or replenishment of the raw material'
already used. The clearance is allowed duty free. The G
details of items allowed for import against a specific export
... .A
product are published by the Ministry of Commerce in
their Input Output Norms which are part of the Exim Policy.
DEPB Scheme
H
1060
SUPREME COURT REPORTS
[2008] 10 S.C.R.
1 '
A
Under this scheme the exporters are issued DEPB scrips
which allows them the specific amount to be utilized for
payment of Customs duty. The amount for which DEPB
scrip is issued depends upon the rate for a particular
export product. The Ministry of Commerce notifies DEPB
-y....
~
B
credit rates for export of an item. The DEPB scrip is
'"
freely transferable and can be used to debit the payment
I
of duty at the time of clearance of goods except capital
goods and goods mentioned in negative list."
15. An attempt was made on behalf of the assessee to
c refer to SI. No.1 (d) of the said notification which refers to goods
exported under bond without payment of excise duty. It is only
SI. No. 1 (e) which deals with benefit under the EXIM Policy but,
at the same time, confines to DEEC and EPCG Scheme and
not to the DEPB Scheme. SI. Nos. 1 (a), (b), (c) and (d), all deal
~
D with export of goods in the normal course, where duty becomes
_,
payable under the provisions of Central Excise Act, 1944 or the
Customs Act, 1962, as the case may be, and to the Customs or
Excise duties leviable on goods so exported. They do not deal
with imports or exports under the EXIM Policy which fall in SI.
E No. 1(e).
16. Rule 13 of the Central Excise Rules, 1944, which was
in force at the time of initial export of goods in question (February 1998), provides as under:
F
"RULE 13- Export in bond of goods on which duty has
,..
not been paid-
(1)
The Central Government may, from time to time, by
notification in the Official GazetteG
(a)
permit export of specified excisable goods in
bond without payment of duty, in the like manner,
)
as the goods regarding, which the rebate is
-;....
granted under sub-rule (1) of rule 12 from a
J.
factory of manufacture or warehouse or any
H
other premises as may be approved by the
Commissioner of Central Excise;
~
COMM. OF CUSTOMS, CALCUTTA v. INDIAN
RAYON & INDUSTRIES LTD. [BHAN, J.]
1061
(b)
specify materials, removal of which without A
payment of duty from the place of manufacture
or storage for use in the manufacture in bond of
export goods, may be permitted by the
Commissioner of Central Excise;
(c)
allow removal of excisable material without· 8
payment of duty for the manufacture of export
goods, as may be specified, to be exported in
execution of one or more export orders; or for
replenishment of duty paid materials used in the
manufacture of such export goods already C
exported for the execution of such orders, or both;
subject to such safeguards, conditions and limitations
as regards the class or description of goods, class
or description of materials used for manufacture D
thereof, destination, mode of transport and other allied
matters as may be specified in the notification which
the exporter undertakes to abide by entering into a
bond in the proper form with such surety or sufficient
security, and under such conditions as the
Commissioner approves.
E
(2)
The Central Government may, from time to time, by
notification in the Official Gazette, permit export of
specified excisable goods in bond, without payment
of duty from a factory of manufacture or warehouse,
F
to Nepal or Bhutan, subject to such conditions or
limitations as regards the class of goods, destination,
mode of transport and other matters as may be
specified therein.
Explanation 1.- In this rule, the expression "manufacture" G
includes the process of blending of any goods or making
alterations or any other operation thereon.
Explanation II.- In this rule, the term 'materials' shall include
raw materials, consumables, components, semi-finished H
A
B
1062
SUPREME COURT REPORTS
[2008] 10 S.C.R.
goods. assemblies. sub-assemblies, intermediate goods,
accessories, parts and packaging materials used in the
manufacture of export goods but does not include capital
goods used ·in the factory in or in relation to manufacture
of export goods."
17. Rule 14 provides for entering into General Bond, for
permission to export goods from India under the prescribed
conditions and Rule 14A provides for penalty for failure to furnish proof of export within the prescribed period. SI. No. 1 (d) of
Notification No.· 94/96-Cus. covers these instances where
C goods are manufactured in India and exported without payment
of duty in accordance with the procedure set out in Rule 13, as
indicated above. SI. No. 1(d) has, therefore, no relevance to
exports made under Export Import Policy Schemes.
0
18. Since the two consignments vide Bills of Entry Nos.
930 dated 12th August, 1998 and 2440 dated 29th May, 1998
under DEPB Scheme do not get the benefit of Notification
No.94/96-Cus., the order of theTribunal deserves to be set aside
and the order of the Commissioner of Customs restored. Ordered accordingly. Appeal is allowed with costs.