CBIC vide Circular No. 17/2019-Customs dated June 19, 2019, has clarified the issue related to availability of exemption from the additional duty of customs leviable under Section 3 of Customs Tariff Act, 1975 under notification no. 94/96-Customs dated December 16, 1996, on the reimport of jewellery which had been earlier exported either for participation in an exhibition or on a consignment basis.
Re-import of jewellery which was exported under bond/LUT for exhibition abroad or on a consignment basis, per se indicates that there was no sale involved. Thus, there was no liability to pay Central Excise duty as it arises only at the time of the first sale by the manufacturer as per provisions under the Articles of Jewellery (Collection of Duty) Rules, 2016, inspite of leviability of Central Excise duty that had already arisen at the time of manufacture. Condition 1(d) of the notification no. 94/96- Customs requires payment at the time of re-import of Central Excise duty not paid initially at the time of export.
As in the present case, no duty was required to be paid for goods which have not been sold and have been re-imported, hence the said condition requiring payment of Central Excise duty in such cases appears to be not applicable even if the re-import is taken to be falling under condition 1(d) of the notification. However, such cases appear to fall more appropriately under residuary entry at Sl. No. 3 of the said notification as the goods were allowed to be exported under simple LUT which was even not required to be registered with Central Excise authority. Hence, in effect, the claim of re-import under condition 1(d) or 3 does not materially alter the situation. Therefore, no duty is payable in such cases of re-import provided all other conditions of the notification are met.
Complete Circular can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/06/Circular-No-17-2019.pdf