EOU Appellants Ordered to Deposit Duty: Tribunal Decision on Deemed Exports Dispute

The Tribunal ordered the appellants, a 100% EOU, to deposit Rs. 4 lakhs towards duty by a specified date. Compliance would result in waiving the remaining duty amount and outstanding penalty, with recoveries stayed pending appeal disposal. The dispute centered on the refusal to include deemed exports in calculating concessional duty entitlements. Despite citing Tribunal judgments, the appellants failed to establish a strong prima facie case for waiving the entire demanded duty. The decision was based on the lack of compelling evidence regarding the includability of deemed exports, leading to a partial waiver of pre-deposit amounts.

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Issues:
1. Stay applications seeking waiver of pre-deposit of duty, penalty, and interest under Section 11AB.
2. Dispute regarding the includability of deemed exports for determining domestic clearances at a concessional rate of duty.

Analysis:
1. The appellants, a 100% EOU, filed stay applications to waive pre-deposit of duty amounting to Rs. 8,62,317, penalty, and interest under Section 11AB. The dispute centered around the department's refusal to include deemed exports in calculating the limit of 50% of the FOB value of exports for determining concessional duty entitlements. The Tribunal noted that deemed exports, being clearances within the country, cannot be considered as exports for the purpose of concessional duty levy. Despite the appellants citing Tribunal judgments, the Tribunal found that they did not establish a strong prima facie case to warrant waiving the entire demanded duty.

2. Consequently, the Tribunal ordered the appellants to deposit Rs. 4 lakhs towards duty by a specified date, with compliance to be reported shortly after. Upon this deposit, the pre-deposit of the remaining duty amount by the appellant company and the outstanding penalty by one of the partners would be waived, and recoveries stayed pending the appeal's disposal. The decision was based on the lack of a compelling case made by the appellants regarding the includability of deemed exports in determining concessional duty entitlements, ultimately leading to the partial waiver of pre-deposit amounts.

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