CESTAT Upholds Duty Demand and Penalty for Monofilament Yarn Manufacturer

The Appellate Tribunal CESTAT, New Delhi, upheld the demand for duty amounting to Rs. 58,83,002 and imposed an equal penalty on the appellants engaged in manufacturing monofilament yarn and HDPE ropes. The Tribunal dismissed arguments of inconsistency in the CRCL's opinion and time-barred show cause notices. Despite the appellant's financial difficulties, supported by an affidavit, the Tribunal required a further deposit of Rs. 10,00,000 within 12 weeks to stay recovery until the appeal's resolution. Compliance would waive the pre-deposit of the remaining duty and penalty.

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The Appellate Tribunal CESTAT, New Delhi, consisting of Shri M. Veeraiyan, P.K. Das, JJ., heard a stay petition for the second time. The case involved the appellants engaged in manufacturing monofilament yarn and HDPE ropes. Investigations began with a consignment seizure on 27-3-98, leading to a show cause notice on 29-9-98. The Central Revenue Control Laboratory (CRCL) determined the sample as a green polyethylene plastic cord. A subsequent report on 14-3-2000 provided specific gravity data. The Tribunal had previously ordered a pre-deposit of Rs. 7 lakh, later reduced to Rs. 5 lakh by the Delhi High Court. The final order demanded Rs. 58,83,002 as duty and imposed an equal penalty.

The consultant argued that the CRCL's revised opinion was inconsistent, and the subsequent show cause notices were time-barred. The appellant faced financial difficulty, supported by an affidavit from the company's director. The consultant cited a Delhi High Court case for financial hardship consideration. The Tribunal found the chemical examiner's report supporting the Department's view, and the limitation argument invalid. The financial hardship claim lacked evidence beyond the director's affidavit. The Tribunal considered the Revenue's interest, requiring a further deposit of Rs. 10,00,000 within 12 weeks. Upon compliance, the pre-deposit of the remaining duty and penalty was waived, with recovery stayed until the appeal's resolution.

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