Legal principle

A re-import exemption presupposes sufficient continuity between the export and the return; where the original concessional transaction has concluded with export to an FTWZ/SEZ, a subsequent movement into the DTA under a fresh contract/EC is a fresh import and not a re-import eligible under Notification No.45/2017-Cus.

Court decision

The Delhi High Court dismissed all four appeals, upholding the CAAR's rulings: the movement of equipment from the FTWZ into the DTA pursuant to the subsequent EC constitutes a fresh import, not a re-import under S.No.5 of Notification No.45/2017-Cus, and the exemption claim fails.

Facts

Baker Hughes Oilfield Services, a sub-contractor providing technical support services to oil and gas exploration companies such as ONGC and Cairn India, obtained Advance Rulings from the CAAR under Section 28-H of the Customs Act, 1962. The rulings concerned movement of petroleum-operations equipment from a Special Economic Zone/Free Trade Warehousing Zone into the Domestic Tariff Area, after the equipment had earlier been sent from DTA to the FTWZ. CAAR answered the reference in the negative, holding the appellants not entitled to exemption from Basic Customs Duty, IGST and compensation cess under Serial No.5 of Notification No.45/2017-Cus. Four appeals against these rulings were disposed of by a common judgment of the Delhi High Court.

Key provisions

• Section 7, Customs Act, 1962 — Appointment of customs ports, airports
• Section 25(1), Customs Act, 1962 — Power to grant exemption from duty
• Section 58, Customs Act, 1962 — Licensing of private warehouses
• Section 5, The Integrated Goods and Services Tax Act, 2017 — Levy and collection.
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 57, Customs Act, 1962 — Licensing of public warehouses
• Section 51, Customs Act, 1962 — Clearance of goods for exportation