2016 (4) TMI 973 - HC - Central Excise

High Court proposes selling non-bonded goods to fund appeal deposit for duty-free goods case

M/s Avesthagen Ltd. Versus The Commissioner of Central Excise Bangalore – Versus, The Assistant Commissioner (Technical), The Assistant Commissioner of Central Excise

The High Court proposed a solution for a public limited company facing financial constraints due to the confiscation of duty-free goods. The court ... Seeking permission to sell the non-bonded duty paid goods - to make deposit which is a pre-requisite of filing the appeal - Held that:- if the petitioner is placed on terms and under the strict supervision of the respondent, if the non-bonded goods which are the absolute property of the petitioner could be ascertained, the petitioner could be permitted to sell the same in favour of purchasers whom the petitioner may identify and if the monies raised are directly provided to the respondent or made to be deposited before the CESTAT to meet the demand of the pre-conditional deposit and the remaining amount if any could be handed over to the respondent in partial discharge of any liability, subject to the result of the appeal, it would meet the ends of justice. Therefore, on sale of such goods, the amount shall firstly be deposited as a pre-conditional deposit before the CESTAT and the remaining amount under protest shall be appropriated by the respondent, subject to the result of the appeal. - Petition disposed of Issues:1. Confiscation of duty-free goods imported by the petitioner under the Customs Act, 1962.2. Rejection of petitioner's request to sell non-bonded goods to raise funds for deposit required for filing an appeal.3. Dispute regarding removal of non-bonded goods without full payment of adjudication levies.Analysis:1. The petitioner, a public limited company engaged in scientific research and export of research services, claimed to be a 100% export-oriented Software Technology Park industrial unit with necessary permissions. They imported duty-exempted goods bonded in private warehouses but also procured non-bonded goods on payment of duty. An adjudication order by the respondent confiscated duty-free goods and demanded duties, fines, and penalties. The petitioner faced financial constraints and sought to sell non-bonded goods to raise funds for appeal deposit, which was denied by the respondent.2. The High Court acknowledged the petitioner's financial difficulties and proposed a solution. The court suggested that if the petitioner could identify and sell their non-bonded goods under the respondent's supervision, the proceeds could be used to make the required deposit for the appeal. The remaining amount, if any, could be handed over to the respondent, subject to the appeal's outcome. This approach aimed to balance the petitioner's need to raise funds with the respondent's interest in recovering dues.3. The Court ordered that the amount raised from selling the goods must first be deposited as a pre-conditional deposit before the Customs, Excise and Sales Tax Appellate Tribunal (CESTAT). Any remaining amount, after meeting the deposit requirement, would be given to the respondent. The CESTAT was instructed to expedite the appeal process, aiming for completion within three months or earlier. By allowing the petitioner to sell non-bonded goods under supervision and using the proceeds to meet appeal requirements, the Court sought to ensure justice was served while addressing the financial constraints faced by the petitioner.