2006 (8) TMI 389 - AT - Customs

CESTAT grants waiver of Rs. 30,95,971 duty and Rs. 25 lakhs penalties on misuse of DEEC/Advance License Scheme.

The Appellate Tribunal CESTAT, Mumbai, granted waiver of pre-deposit of duty and penalties totaling Rs. 30,95,971 and Rs. 25 lakhs respectively on M/s. ... Stay/Dispensation of pre-deposit - Demand and penalty Issues:1. Waiver of pre-deposit of duty and penalty on M/s. Anil's Creations and individuals involved.2. Misuse of DEEC/Advance License Scheme by M/s. Anil's Creations.Analysis:The judgment by the Appellate Tribunal CESTAT, Mumbai, involved the application for waiver of pre-deposit of duty and penalty amounting to Rs. 30,95,971 and Rs. 25 lakhs respectively on M/s. Anil's Creations, along with penalties on individuals associated with the company. The duty demand was confirmed due to the misuse of the DEEC/Advance License Scheme by importing HDPE 'B' Moulding Grade duty-free and selling it in the market without utilizing it for the manufacture of resultant products and failing to meet export obligations, violating the Customs Act, 1992-97 Exim Policy, and Notification No. 204/92-Cus., dt. 19-5-1992.The Tribunal considered the arguments from both sides and found merit in M/s. Anil's Creations' submission that the quantity-based advance license for the imported goods had been canceled by the DGFT, and the DEEC Book was not utilized. It was also noted that the bills of entry for the imports were not filed by M/s. Anil's Creations or under their authority by any CHA. Despite these submissions, no investigation was conducted to determine if the CHA who signed the bills of entry was authorized by M/s. Anil's Creations. Consequently, the Tribunal decided to waive the pre-deposit of duty and penalties, staying the recovery pending the appeals.In conclusion, the judgment focused on the misuse of the DEEC/Advance License Scheme by M/s. Anil's Creations, leading to the confirmation of duty demand and penalties. However, considering the cancellation of the advance license, non-utilization of the DEEC Book, and lack of investigation regarding the authorization of the CHA who filed the bills of entry, the Tribunal granted the waiver of pre-deposit and stayed the recovery of duty and penalties during the appeal process.