2001 (12) TMI 707 - AT - Customs

Issues:
1. Waiver of pre-deposit of duty and penalty for imported goods.
2. Allegation of non-compliance with end-use conditions for imported goods.
3. Application of Section 111(o) of the Customs Act, 1962.
4. Observations on limitation under Section 28(1) of the Customs Act, 1962.
5. Evaluation of technical opinion by M/s. Shriram Institute.
6. Consideration of Supreme Court judgment in Weston Components Ltd. v. CC, New Delhi.
7. Granting unconditional waiver of pre-deposit and stay on recovery during appeal.

1. Waiver of Pre-deposit of Duty and Penalty:
The case involved an application for the waiver of pre-deposit of duty amounting to Rs. 1,05,12,925/- and a penalty of Rs. 50 lakhs. The applicants imported goods without paying duty as per Notification 72/91-Cus. The duty was demanded without specifying the relevant section of the Customs Act, 1962. The Commissioner confirmed the duty and penalty, citing non-furnishing of end-use evidence and deliberate evasion of duty. The applicants sought waiver due to inability to provide proof of bond discharge for each consignment.

2. Allegation of Non-Compliance with End-Use Conditions:
The show cause notice alleged that the imported goods were not used for manufacturing the specified end product, thermoplastic polyurethane. A technical opinion indicated that the final products resembled rigid foam, not thermoplastic polyurethane. The Commissioner invoked Section 111(o) of the Customs Act, 1962 for alleged confiscation due to non-compliance. However, the applicants argued that the bond for each consignment was discharged but lacked evidence due to time elapsed.

3. Application of Section 111(o) of the Customs Act, 1962:
The Commissioner alleged that the goods were liable to confiscation under Section 111(o) due to non-compliance with end-use conditions. However, the applicants contended that the bond for each consignment was fulfilled, though evidence was unavailable. The Commissioner's decision was based on the lack of proof of bond discharge.

4. Observations on Limitation under Section 28(1) of the Customs Act, 1962:
The Tribunal found that the demand for duty was time-barred under Section 28(1) of the Customs Act, 1962. The Commissioner's reliance on the bond/undertaking for enforcement lacked details in the show cause notice. The absence of bond details for each importation raised doubts regarding the enforceability of the promise made under those bonds.

5. Evaluation of Technical Opinion by M/s. Shriram Institute:
The Tribunal noted that the opinion by M/s. Shriram Institute, indicating the sample as thermoplastic, was not adequately considered by the Commissioner. The Commissioner introduced irrelevant material and past situations of the applicants, which were not pertinent to the current proceedings. The Tribunal emphasized the specific opinion provided by M/s. Shriram Institute regarding the nature of the sample.

6. Consideration of Supreme Court Judgment in Weston Components Ltd. v. CC, New Delhi:
The Commissioner referenced a Supreme Court judgment in Weston Components Ltd. v. CC, New Delhi, to justify the imposition of penalties. However, the Tribunal found discrepancies in the application of this judgment and the assessment of penalties in the present case. The Tribunal highlighted the need for a more accurate interpretation of legal precedents in penalty imposition.

7. Granting Unconditional Waiver of Pre-deposit and Stay on Recovery During Appeal:
Considering the lack of vital documents, including proof of bond discharge and the discrepancies in the technical evaluation, the Tribunal granted an unconditional waiver of pre-deposit of duty and penalties. It also ordered a stay on the recovery of the amounts during the pendency of the appeal, providing relief to the applicants based on the circumstances of the case.

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