2006 (2) TMI 380 - AT - Customs

Customs Tribunal upholds duty & penalty demand of Rs. 58 lakhs, disallows benefits under Notifications due to misdeclaration.

ADISHWAR SPINNERS LTD. Versus COMMISSIONER OF CUSTOMS, CHENNAI

The Tribunal upheld the Commissioner of Customs' demand for duty and penalty of over Rs. 58 lakhs from the appellants for imported goods. The benefits ... Stay/Dispensation of pre-deposit - Appeal - Early hearing Issues:1. Demand of duty and penalty imposed by the Commissioner of Customs.2. Disallowance of benefits under Notifications and misdeclaration of goods.3. Request for waiver of pre-deposit and stay of recovery.Analysis:1. The Commissioner of Customs demanded duty of over Rs. 58 lakhs from the appellants for goods imported and cleared under Bills of Entry. Additionally, a penalty equal to the duty amount was imposed under Section 114A of the Customs Act. The appellants sought waiver of pre-deposit and stay of recovery for the duty and penalty amounts. The Tribunal noted the absence of representation for the appellants and a request for adjournment on medical grounds. Despite a letter from an advocate seeking adjournment, as no Vakalat was on record, the request was not entertained. After examining the records and hearing the SDR, the Tribunal proceeded with the case.2. The imports declared as 'Greasy Raw Wool of 34.0 Microns mean fibre diameter' were cleared with concessional duty rates and exemption from Special Additional Duty (SAD) under specific Notifications. However, the Commissioner disallowed these benefits in the final assessment. The mean fibre diameter was found to be less than 34 Microns in a test, and a document claiming to be a test report from the Australian Wool Testing Authority was deemed forged. The party misdeclared the goods to claim exemption from SAD, stating they would not undergo manufacturing processes. However, the Managing Director admitted to subjecting the goods to manufacturing, rendering the exemption invalid. The appellants failed to establish a prima facie case against the duty demand. The Director cited financial hardships in the stay application affidavit, but no financial documents were provided.3. The Tribunal directed the appellants to pre-deposit the balance duty amount within four weeks as per Section 129E of the Customs Act. Compliance with this direction would result in a waiver of pre-deposit and stay of recovery for the penalty amount. Another application sought early appeal disposal, which was unopposed. Considering the significant stakes involved, the Tribunal inclined to expedite the appeal hearing upon pre-deposit compliance. The date for the appeal hearing would be scheduled based on compliance with the pre-deposit directive.