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Issues: Application for waiver of pre-deposit of duty and penalty arising from denial of benefit of duty-free import due to non-fulfillment of export obligation under EPCG License.
In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand was the application for waiver of pre-deposit of duty amounting to Rs. 19,71,092/- and penalty of Rs. 10 lakhs. The case stemmed from the denial of the benefit of duty-free import of capital goods under Notification No. 160/92-Cus., dated 20-4-1992, due to the non-fulfillment of export obligation against an EPCG License held by the applicants for the import of capital goods. The Tribunal noted that the export obligation was not completely fulfilled within the stipulated period, despite the applicants applying for an extension from the DGFT, which was initially rejected. The Tribunal observed that the period for fulfillment could not be extended beyond 31-3-2001. While considering the plea of financial hardship due to significant losses incurred by the applicant-company and the restriction on dealing with goods valued at over Rs. 1,46,94,408/-, the Tribunal directed a pre-deposit of Rs. 5,00,000/- within eight weeks. Upon such deposit, the balance duty and penalty pre-deposit would be waived, and the recovery stayed pending the appeal. Non-compliance would lead to the vacation of stay and dismissal of the appeal without prior notice. The Tribunal emphasized the importance of compliance, setting a reporting deadline of 15-12-2003 for the same. The judgment carefully weighed the financial hardship plea against the company's income status and the ongoing debate regarding its financial position. Despite acknowledging the applicant as a BIFR company, the Tribunal found that the balance sheet for the year 2002-2003 indicated a high income, leading to the decision to direct the specified pre-deposit amount within the given timeframe to proceed with the appeal process.
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