2004 (6) TMI 421 - AT - Customs

Summary

Issues:
1. Stay of order of confiscation under Rule 41 of CESTAT (Procedure) Rules.
2. Waiver of pre-deposit of duty, penalty, and personal penalty.
3. Non-compliance of EPCG scheme terms in manufacturing and exporting goods.
4. Financial hardship faced by the appellants.
5. Appropriation of Bank Guarantee by DGFT for failure to perform export obligation.
6. Requirement of pre-deposit of duty to safeguard revenue interest.

Analysis:

1. The Tribunal considered a miscellaneous application seeking a stay of the order of confiscation under Rule 41 of the CESTAT (Procedure) Rules. The Bench concluded that such a stay could not be granted as the goods imported had been confiscated for non-compliance with the terms of a Notification. Hence, the application for stay was rejected.

2. The appellants sought a waiver of pre-deposit of duty amounting to Rs. 2,38,23,605/-, penalty of Rs. 50,00,000/-, and a personal penalty of Rs. 10,00,000/-. Both stay applications were taken up together for disposal as per the law.

3. The appellants had imported capital goods under the EPCG scheme for manufacturing final products and exporting them. However, they failed to fulfill the terms of the scheme, leading to proceedings for recovery of customs duty and imposition of penalties.

4. The appellants, facing financial hardship and having filed a petition under BIFR, argued that they could not pre-deposit the required amounts. They requested dispensation from paying the redemption fine to continue functioning to meet export obligations.

5. The learned SDR highlighted that the appellants' request for an extension of time had been denied by the DGFT, and their Bank Guarantee had been appropriated for failing to meet export obligations. The SDR argued against granting a waiver, emphasizing the need to safeguard revenue interests.

6. After careful consideration, the Tribunal observed that the duty liability had not been deposited by the appellants, and they had not fulfilled the terms of the Notification. Despite claims for a lower duty amount, the appellants were directed to pre-deposit Rs. 50,00,000/- within three months to safeguard revenue interests. Failure to comply would result in potential dismissal of the appeal under Section 129E of the Act.