Tribunal directs EOU to deposit Rs. 3 lakhs within 6 weeks for EPCG scheme conversion appeal

The Tribunal directed the appellant, a 100% Export Oriented Unit seeking EPCG scheme conversion, to deposit Rs. 3 lakhs within six weeks. Compliance would lead to the Commissioner (Appeals) deciding the appeal on its merits without additional pre-deposit requirements. The Tribunal found the Commissioner (Appeals) had not decided the case on merits and had issued orders without hearing the appellant. The appeal was allowed by remand, disposing of the stay petition without expressing any opinion on the case's merits.

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Issues:
1. Stay petition regarding duty demand, interest, and penalties imposed by the original authority.
2. Non-compliance with the stay order by the appellant.
3. Lack of personal hearing before passing the impugned order by the Commissioner (Appeals).
4. Pre-deposit of dues as per the impugned order.
5. Appeal for remand regarding the duty liability and compliance with pre-deposit conditions.

Analysis:
The case involved a 100% Export Oriented Unit (EOU) seeking conversion to the Export Promotion Capital Goods (EPCG) scheme. The Development Commissioner granted permission for the switch, leading to the issuance of an EPCG license. However, the original authority demanded duty of Rs. 11,20,528 along with interest and penalties. The Commissioner (Appeals) initially directed the appellant to deposit the entire duty amount. Subsequently, due to non-compliance with this order, the appeal was dismissed for violating Section 35F provisions.

The appellant contended that they were not granted a personal hearing before the impugned order was passed by the Commissioner (Appeals). Additionally, it was argued that the stay order was issued without hearing the applicant, who claimed to be operating at a loss. The Departmental Representative supported the Commissioner's findings and requested the pre-deposit of dues as per the impugned order.

Upon reviewing the submissions and records, the Tribunal noted that the Commissioner (Appeals) had not decided the case on its merits and had issued the stay order and final order without hearing the applicants. The appellant then proposed a maximum duty liability of Rs. 6 lakhs and expressed willingness to pre-deposit Rs. 3 lakhs.

Consequently, the Tribunal directed the appellant to deposit Rs. 3 lakhs within six weeks and report compliance by a specified date. Upon fulfilling this pre-deposit condition, the Commissioner (Appeals) was instructed to decide the appeal on its merits without requiring any further pre-deposit. It was clarified that the Tribunal had not expressed any opinion on the case's merits, allowing the appeal by way of remand, and disposing of the stay petition accordingly.

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