2004 (4) TMI 499 - AT - Customs

Summary

Issues:
1. Duty demand and penalties imposed for not fulfilling export obligation.
2. Premature initiation of proceedings before Development Commissioner's decision.
3. Dispute over the timing of show cause notice issuance.

Analysis:
1. The case involved duty demand of Rs. 6,95,52,486/- and penalties due to the appellant's failure to meet export obligations, as per the double bond and Notification No. 13/81-Cus. Additionally, a penalty of Rs. 6,00,000/- on the company and Rs. 1.75 crores on the Managing Director were imposed. The imported goods were confiscated with a redemption fine of Rs. 6,95,000/-. The total demand included interest and further duty amounting to Rs. 13,18,276/-.

2. The appellant argued that the proceedings were initiated prematurely before the Development Commissioner's final decision, citing a Board Circular. The Tribunal referenced past judgments like T. Gayathri Reddy v. CC, Guntur and T.V. Raja Reddy v. C.C.E. to support their position. However, the Tribunal noted that in the present case, the Development Commissioner had already adjudicated and penalized the appellant with Rs. 20,000/-, making the premature initiation argument invalid.

3. Upon careful consideration, the Tribunal found that the appellant did not contest their default in meeting export obligations. The dispute centered around the timing of the show cause notice issuance vis-a-vis the Development Commissioner's decision. The Tribunal upheld the proceedings, stating that the demands were confirmed only after the Development Commissioner's satisfaction. Consequently, the Tribunal ruled that the duty amounts must be pre-deposited within four months to waive the penalties on the appellant-company and Managing Director. Failure to comply would lead to dismissal of the appeals under Section 129E of the Act, with a compliance report due on 3rd September 2004.