COMMISSIONER OF CUSTOMS (AIR) Vs. ARAVIND FASHIONS LTD.

JUDGEMENT

(1.) This appeal is filed by the Department challenging the Final Order No. 851 of 2007, dated 12-7-2007 : [2007 (217) E.L.T. 453 (Tribunal)], passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Chennai, by raising the following questions of law:

(2.) We find that in this case, the first respondent imported a consignment of leather labels valued at Rs. 13,93,800/- under Bill of Entry No. 120836, dated 2-3-1999 and claimed benefit of Notification No. 20/1999, under which labels, stickers, etc., imported by bona fide exporters are exempted from payment of the whole of basic Customs duty and additional duty of Customs. The department, however, was of the view that the first respondent diverted the imported labels to domestic market and accordingly, a show cause notice was issued proposing to recover the exemption availed. In the adjudication, the Commissioner found that the first respondent had made false claim that they are bona fide exporter for availing the benefit of exemption and accordingly, duty was demanded, apart from imposing penalty and interest.

(3.) Aggrieved by the said order, the first respondent went on appeal to the Tribunal. The Tribunal held that the adjudicating authority has not rendered a finding that the first respondent was not an exporter and accordingly, set aside the order passed by the Commissioner holding that denial of exemption benefit as per the notifications and imposing penal liabilities on the first respondent is not sustainable. The Tribunal also observed that the notifications do not specify any condition regarding volume of exports required to be made by a person to qualify as bona fide exporter.