2004 (5) TMI 513 - AT - Customs

Summary

Issues involved:
1. Challenge to the legality of less charge demands and notice issued under the Customs Act, 1962.
2. Adjudication of the confiscated goods and imposition of penalties.
3. Review of the Supreme Court order directing continuance of proceedings.
4. Compliance with the Supreme Court directions for adjudication.
5. Pre-deposit of penalties pending appeal and stay of recovery.
6. Interpretation of the provisions of the Customs Act, 1962 regarding duty, interest, and penalties.
7. Application for waiver of pre-deposit of penalties based on financial hardship.

Analysis:

1. The initial challenge was against the less charge demands and notice issued under the Customs Act, 1962. The High Court set aside the demands, but the Supreme Court reversed the decision and directed the continuation of proceedings. The Supreme Court ordered the completion of adjudication within a specified timeframe, emphasizing the need for the department to supply all relied-upon documents to the applicants.

2. Subsequently, the Commissioner adjudicated the matter, confirming the demand, confiscating the drums, imposing penalties, and allowing redemption on payment of a fine. The applicants filed for waiver of pre-deposit and stay of recovery pending appeal, citing financial hardship. The Tribunal considered the financial situation of the importers and directed a partial pre-deposit of the penalty amount, with the balance waived pending appeal.

3. The Tribunal examined the argument that the goods were cleared through Bombay Port under Section 47 of the Customs Act, 1962, and therefore, the clearance could not be reviewed. It was found that the drums were discovered to be stainless steel only after clearance, and the contention of contravention of natural justice was not tenable based on the Supreme Court's order and document disclosure.

4. The contention that the goods were eligible for exemption from duty under a specific notification was also considered. However, the Tribunal found the argument debatable due to the high value of the packing material, the nature of the stainless steel drums, and the importers' historical use of mild steel drums. The focus shifted to the potential confiscation of the goods as prohibited items, leading to penal liability.

5. The Tribunal held that a strong prima facie case for waiver was not established by the importers. A partial pre-deposit was ordered based on financial hardship, with the balance of the penalty waived pending appeal. Failure to comply would result in the vacation of stay and dismissal of the appeal.

6. The Tribunal waived the pre-deposit of penalties for the other two applicants as their involvement in the import of stainless steel drums disguised as packing material was not clearly disclosed in the order, indicating a lack of prima facie evidence of their role in circumventing import restrictions.