AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (8) TMI 325
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....ndividuals on various other counts. Challenging that order-in-original before CESTAT in appeal, the petitioner has also filed application for stay with prayers not to insist upon pre-deposit of duty, interest and penalty, and such applications are partly allowed by CESTAT by the impugned order dated 30-8-2007. Application for modification of that order is dismissed by the order dated 10-12-2007. Thus, the main prayer in the present petition is for a direction to CESTAT to hear and decide the petitioner's appeal without insisting upon any pre-deposit, even as it was directed by the order dated 30-8-2007 to deposit only 15% of the duty demanded from them within 12 weeks and, subject to pre-deposit of that amount, balance duty demanded and penalties imposed were waived and recovery thereof was stayed. In view of high stakes of revenue involved, the appeals were ordered to be taken up on 28-11-2007. Admittedly, even after dismissal on 10-12-2007 of the modification application of the petitioner, 15% of the duty demanded were not deposited; and even 10% of the duty amount required to be deposited as condition precedent for the ad interim relief granted herein were not paid, due to which....
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....2 According to the aforesaid elaborate impugned order dated 30-3-2007 of the Commissioner, admittedly, both the units of the petitioner produced castor oil intended for export and, by arrangement with tank owners, goods were unloaded into a common tank which was not bonded and no separate accounts showing unit-wise receipt of castor oil from one or the other unit were maintained. The proprietor of the transporter firm had admitted that blank lorry receipt books were given to both the units. The Bhachau unit of the petitioner was always in a position to clear the goods meant for export and load them in lorries and bring them to the common storage tank where they lost their identity and the goods produced by both the units were cleared for export as goods of "TCIL". The unit within the zone used to make payment for raw materials received by Bhachau unit and applications for obtaining DEPB licences were made in the common name of TCIL. 3.3 As for demand of duty amounting to Rs.19,30,85,283/- on 5814.710 MT of castor oil valued at Rs.17,24,52,308.00 on account of clandestine removal of castor oil in excess of the quantity shown in transshipment permit (TP) during the period from Augus....
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....er that the goods may be treated as export by Bhachau unit. That plea was found to be not acceptable in absence of any enabling provision to cover up the legal anomaly. 3.6 As for the proposal for confiscation of 61,151 MT castor oil valued at Rs. 199,88,47,462/- entered for export by TCIL and 5045 MT castor oil (FSG) valued at Rs. 13,59,12,284/- entered for export at TCIL (B) by misdeclaring for export and demand of duty amounting to Rs. 40,76,058/- equal to DEPB credit, it was found that false declarations were made in the shipping bills and forged bills of lading were prepared by the petitioner. The DEFB licences so obtained were transferred to different importers who utilized them against clearance of imported goods. Therefore, demands for duty were confirmed by invoking proviso to Section 28(1) of the Customs Act, 1962. 3.7 Similarly, 852.759 MT Bleaching Earth valued at Rs. 1,63,40,284/- was held to be liable to confiscation under Section 111(o) of the Customs Act, 1962 and payment of duty amounting to Rs. 1,05,17,210/- was also upheld in terms of the proviso to Section 28(1) of the Customs Act, 1962. And, demand of import duty amounting to Rs. 2,59,33,522/- equal to DEPB c....
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....crores, are under detention of the customs authorities and they are not permitted to effect any export clearances of the goods for third parties on job work basis, which was seriously hampering their functioning and the livelihood of more than 150 workers employed in the factory. 6. Learned counsel for the petitioner vehemently argued that the entire basis of the main demand of duty of Rs. 163,44,63,995/- was that both the units of the petitioner were storing the goods in a common storage tank prior to export and the petitioner was not able to co-relate the exact transport document with the corresponding shipping bill. There was no positive evidence of any sale in the domestic market. He submitted that analysis of details of the goods removed from the zone unit and the DTA unit would show that actual quantity exported had exceeded the total quantity removed as per the transport documents and the difference for the entire period came to 39,702.26 MT. The entire quantity of castor oil removed from the zone unit and the DTA unit were exported, though allegedly not unloaded in Russia, but diverted to other countries. But castor oil having never been chargeable to excise duty, there co....
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....lternative efficacious remedy wherein only a discretionary order granting interim relief in favour of the petitioner was made. It was after receipt of intelligence about various irregularities, detailed investigation and recording of statements under Section 108 of the Customs Act that show cause notice dated 27-7-2004 was issued to both the units of the petitioner. The petitioner had initially suppressed details of that notice. It is submitted that the Tribunal has specifically held that the petitioner's unit did not have strong prima facie case for total waiver of dues as per the order-in-original. Considering the financial hardship and other contentions of the petitioner, substantial relief was granted after considering the contentions of the petitioner. However, in respect of the demand related to the period from August 1999 to March 2002, the petitioner had prolonged the proceedings and, instead of complying with the direction of the Tribunal, it had only filed a modification application, in which again the Tribunal had extended time for pre-deposit up to 21-1-2008. Thereafter, even though the petition was prepared in January 2008, it was not moved immediately but moved for ur....
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....cial hardship was not available to the petitioner as the petitioner had approached B.I.F.R. only with a view to seeking protection under the Sick Industrial Companies Act and the reference was rejected by order dated 8-11-2005 after noting that the company was not able to effectively rebut the charge relating to speculative losses and acts of misappropriation and mis-representation were resorted to by the company with a view to getting itself registered with the B.I.F.R. in order to avoid financial obligations under the law. 8. Having heard learned counsel appearing on both sides and upon perusal of the elaborate written submissions, it was clear that, prima facie, there were various anomalies and discrepancies in the claims of export made by the petitioner and huge quantities of castor oil was removed without being properly accounted for in the related documents and records required to be maintained under the law. There is prima facie evidence of excess removal of goods and contradictory stand of exporting excess goods as well as removing excess quantities in the domestic market. In that view of the matter, all the demands of duty, interest and penalties are not without any subst....