Ms. Jyoti Balasundaram, Vice-President - The demand of customs duty of Rs. 1,46,616 on the ground that, since the assessees exported goods under bond without payment of duty in terms of Notification No. 263/79-C.E., dated 22-9-1979, they were covered by SI. No. 1(d) of the Table to Notification No. 94/96'Cus. covering re-import of goods exported inter alia under bond, is under challenge in the present appeal.

2. We have heard both sides.

3. The assessees had exported two consignments of tyre re-treading machinery and accessories manufactured by them for the purpose of exhibition in international trade fair held in USA and Italy in Feb, 2001 and April, 2001 and for exhibition in Singapore in Aug., 2001, under bond without payment of duty under Notification No. 263/79 as amended. At the time of re-import, after exhibition, the goods were cleared without payment of duty by claiming exemption to Notification 94/96-Cus., dated 16-12-1996 as amended. Since such goods were exported under bond without payment of duty, they are covered by SI. No. 1(d) of the Table to the Notification which is reproduced herein below :—

and not under SI. No. 3 of the Table which covers goods other than those tailing under SI. Nos. 1 & 2, attracting 'Nil' rate of duty. Our view is in consonance with the provisions of Section 20 of the Customs Act, 1962 which provides for payment of duty on goods re-imported into India. We, therefore, see no merit in the submission of the assessees that reference to Rule 13 of the Central Excise Rules, 1944 in Notification No. 263/79 is merely for procedural compliance and that for all other practical purposes, goods are exempt from payment of central excise duty subject to the condition that the goods are meant for exhibition, trade fair etc. We, therefore, uphold the duty liability; however, we see merit in the submission of the assessees that re-imported goods have been accounted in their stock register, and if they have been cleared from the factory on payment of duty, then the present demand would amount to double demand and cannot be sustained. This factual position requires verification. We also hold that the benefit of MODVAT credit of duty paid on inputs used in the manufacture of re-imported goods would be admissible subject to assessees' establishing duty paid nature of such goods.

4. The appeal is thus disposed of as above.