2002 (9) TMI 442 - AT - Customs

Tribunal Orders Rs.1 Crore Deposit within 8 Weeks for Duty Waiver Appeal

The Tribunal ruled that the Applicants had not established a prima facie case for a complete waiver of the demanded duty. M/s. Roxy Industrial Corpn. was ... Waiver of pre-deposit - export obligation under advance licence - regularisation of default in fulfilment of export obligation - sale of imported dutyfree/raw material in breach of licence conditions - principles of natural justice - personal hearing - stay of recovery during pendency of appealWaiver of pre-deposit - export obligation under advance licence - sale of imported dutyfree/raw material in breach of licence conditions - stay of recovery during pendency of appeal - Whether the appellants were entitled to waiver of pre-deposit of the duty and penalties demanded and whether recovery should be stayed pending appeal. - HELD THAT: - The Tribunal noted that the appellants had imported goods under advance licences and admitted non-fulfilment of export obligation; the appellants also admitted that some imported raw material had been sold and that they filed for extension only after adjudicatory proceedings had commenced. In these circumstances the Tribunal held that the appellants had not made out a prima facie case for complete waiver of pre-deposit. Balancing the pleaded financial hardship against the factors of sale of imported raw material and non-fulfilment of export obligation, the Tribunal exercised its discretion to direct a substantial partial deposit as condition for waiver and stay: M/s. Roxy Industrial Corpn. was directed to deposit a specified sum within a fixed period, on compliance with which the remaining duty and the penalties would be waived for pre-deposit purposes and recovery stayed during the appeal. Failure to comply would result in dismissal of the appeals.Partial waiver granted subject to deposit of the directed amount within the stipulated period; on compliance pre-deposit of remaining duty and penalties waived and recovery stayed; non-compliance to lead to dismissal.Principles of natural justice - personal hearing - regularisation of default in fulfilment of export obligation - Whether the adjudication was vitiated for want of personal hearing or for failure to await decision of licensing authority on regularisation under the scheme. - HELD THAT: - The Tribunal found that personal hearings had been fixed by the Commissioner and the appellants did not demonstrate that they were denied an opportunity to be heard; thus there was no breach of principles of natural justice warranting interference. Further, reliance on authorities permitting regularisation under the scheme did not establish that adjudication should have been stayed: there was no evidence before the Tribunal that any condonation or regularisation had in fact been obtained from the licensing authority at the relevant time, and the admitted failure to fulfil export obligation meant the adjudicating authority was entitled to proceed.No interference on grounds of violation of natural justice or on account of pending application for regularisation; adjudication was properly proceeded with.Final Conclusion: The Tribunal declined complete waiver of pre-deposit but ordered conditional relief: on deposit of the directed sum within the stipulated period the balance duty and penalties were waived for pre-deposit purposes and recovery stayed during the appeal; allegations of denial of personal hearing and of required waiting for DGFT regularisation were rejected. Issues:1. Applications for waiver of pre-deposit regarding duty and penalties imposed by the Commissioner.Analysis:The appellant, represented by Shri Harish Chander, Advocate, sought waiver of pre-deposit concerning duty and penalties imposed by the Commissioner. The advocate argued that the impugned order was passed ex parte without hearing them, emphasizing ongoing proceedings before the DGFT and citing relevant legal precedents. Financial hardship was also pleaded, asserting the lack of available assets. On the other hand, Smt. Neeta Lal Butalia, SDR for the Respondent, opposed the waiver, highlighting the sale of imported raw material and non-fulfillment of export obligations. The Respondent contended that the applicants should deposit at least the maximum amount due, given the circumstances. The Respondent also mentioned that personal hearings were granted but not attended, denying any violation of natural justice principles.The Tribunal considered both sides' submissions and facts. It was acknowledged that the Applicants had imported goods with unmet export obligations and had sold some raw material. The delay in seeking an extension for meeting export obligations was noted, along with the lack of mention of financial hardship in the initial stay application. The Tribunal found no merit in the contention of not being heard personally, as the fixing of a personal hearing was not denied by the Applicants. Consequently, the Tribunal ruled that the Applicants had not established a prima facie case for a complete waiver of the demanded duty. Taking into account the financial hardships claimed and the facts of the case, especially the sale of raw material and non-compliance with export obligations, the Tribunal directed M/s. Roxy Industrial Corpn. to deposit Rs. One Crore within 8 weeks. Upon compliance, the remaining duty and penalties would be waived, with recovery stayed during the appeal's pendency. Failure to comply would lead to dismissal of all appeals without further notice, with a follow-up compliance date set for November 28, 2002.