ORDER
Gowri Shankar, Member (T)
1. The appellant exported three consignments of synthetic organic dyes which were returned in a single consignment by their consignee on account of deficiencies in quality, within three years from the date of exportation. In the bill of entry that the appellant filed for clearance of this consignment, it claimed the benefit of the provisions of Section 20, indicating on the bill of entry that no duty was paid. The department assessed the goods provisionally,ordering deposit of a sum equal to the additional duty of customs payable on the goods. After a round of litigation, which resulted in the matter being remanded to a Assistant Commissioner for passing orders on the ground that the principles of natural justice had not been followed earlier, the Assistant Commissioner passed orders holding that the benefit of Section 20 would be available. On an appeal from this order by the department, the Commissioner (Appeals) took the view that the provisions of Section 20 would not apply. Hence this appeal.
2. Section 20 of the Act, as it stood on the date when the goods were imported (March 1995), provides that the goods imported into India after exportation therefrom would be liable to duty, and subject to all conditions to which goods of the like kind and value are liable or subject. The first proviso to this section provides that if such importation “other than importation of goods exported in bond or of goods produced or manufactured in a free trade zone” takes place within three years after the exportation, on it being established that the identity of the goods exported and the goods imported is the same, the goods are required to pay drawback of customs and excise duty if such drawback had been paid on importation, customs duty equal to excise duty leviable by a State, if drawback of excise duty levied by a State was allowed and in any other case no duty is payable.
3. The goods under consideration were exported from the factory of the appellant without payment of excise duty in terms of a bond executed, as contemplated in Rule 12 of the Central Excise Act. The first proviso to Section 20 refers to “goods exported in bond”, and does not specify whether the bond in question is a bond executed in terms of the Customs Act, 1962 or the Central Excise Act, 1944 or the rules made thereunder. This question came up for consideration before a learned single judge of the Madras High Court in Pelisetty Somasundaram (P) Ltd. v. GOI 1984 (17) ELT 306. The single judge took the view that in the absence of an express provision giving any extended meaning in the Customs Act, 1962 to the term “bond”, it would be proper to confine the meaning of the expression “bond” to a customs bond and therefore the reference to “bond” occurring in the proviso could not be construed to include a bond executed under the Central Excise Act or Rules. On an appeal by the government against this judgment of the division bench of the High Court which confirmed this view, the Supreme Court in its judgment reported in 1999 (113) ELT 378 said, “Upon the facts, we are satisfied that no interference is called for of the judgment of the learned single judge.” Paragraphs 2 & 3 of the Supreme Court’s judgment read as under:-
“2. It would appear that on re-importation of the goods, they were allowed to be cleared without payment of duty under Section 20 of the Customs Act on the strength of a bond under the Central Excise Act. It is only thereafter that the respondent was issued with a notice to pay duty under Section 20, which was the excise duty that had not to be paid when the goods were exported. The respondent replied that the goods were in a bonded excise warehouse and excise duty would be paid when they were cleared therefrom for use in manufacture. It does not appear on the record how and why the goods were allowed to be cleared without payment of duty under Section 20 and the only inference can be that the Customs authorities then honoured the excise bond which they now seek to impugn. Secondly, it may well be that by now the goods have been cleared from the bonded warehouse and excise duty has been paid thereon. Allowing the appellants to collect duty under Section 20 would be tantamount to allowing double taxation.
3. We do not, in the circumstances, feel inclined to go into the precise connotation of a bond under the Customs Act.”
4. In his order, the Commissioner (Appeals) has relied upon this judgment in order to say that the ratio of the judgment of the Madras High Court will not apply. He says, “The only conclusion that can be drawn (from the Supreme Court’s judgment) is that the duty is payable if the goods which were initially exported under bond, are reimported into the country. This confirmed from the last sentence of the judgment in para 2 which reads as ‘Allowing the appellants to collect duty under Section 20 would be tantamount to allowing double taxation (emphasis supplied).'”
5. We do not find it possible to agree with the interpretation that the Commissioner (Appeals) has given to the judgment of the court, our understanding of the judgment, the court has, as specified in paragraph 3, declined to examine the contention as to what precisely the term “bond” in Section 20. This judgment is seen to be based on the fats of the case, and there is no discernible ratio flowing from the judgment. In that situation, the ratio of the judgment of the Madras High Court continues and undisturbed and in the absence of any contrary judgment has to be applied to the facts before it.
6. The appeal is accordingly allowed and the impugned order set aside.