Commissioner upholds duty demand against appellant; Tribunal rejects waiver request; duty liability on merchant exporter.

The Commissioner (Appeals) upheld the duty demand against the appellant, stating that if the department failed to recover the duty from the merchant exporter, it could be recovered from the appellant. The Tribunal rejected the appellant's request for a waiver of pre-deposit of duty, emphasizing that the duty liability primarily rested with the merchant exporter, and the appellant could not seek a waiver for duty that should be recovered from the merchant exporter.

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Issues:
1. Duty liability of the appellant as a surety for the merchant exporter's failure to pay duty on exported goods.

Analysis:
The case involved the appellant, a manufacturer of processed fabric, who cleared consignments of readymade garments for export through a merchant exporter without payment of duty, following the prescribed procedure. The consignments were cleared under a bond by the merchant exporter to export the goods, with the appellants standing as surety. When the merchant exporter failed to provide proof of export within the specified period, a show cause notice was issued to both the merchant exporter and the appellant, demanding duty payment, interest, and imposing penalties. The Assistant Commissioner confirmed the duty against the merchant exporter and imposed penalties on both the merchant exporter and the appellant. On appeal, the penalty imposed on the appellant was set aside, but the duty demand was upheld by the Commissioner (Appeals), stating that if the department failed to recover the duty from the merchant exporter, it could be recovered from the appellant as well.

The appellant sought a waiver of pre-deposit of duty, arguing that the duty should first be recovered from the merchant exporter before being demanded from them. The appellant contended that the department had not made efforts to recover the duty from the merchant exporter but had instead attached their property. The appellant claimed a prima facie case in their favor, asserting that they should not be required to pay the duty until it was recovered from the merchant exporter. However, the Tribunal found that the duty liability was primarily on the merchant exporter, and the appellant had no standing to seek a waiver of pre-deposit for duty that should be recovered from the merchant exporter. Therefore, the Tribunal rejected the appellant's stay petition for waiving pre-deposit of duty, deeming it not maintainable in this case.

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