2004 (4) TMI 512 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty due to cessation of production by the appellant, validity of the license conditions for 100% Export Oriented Unit, ex parte order due to non-appearance of Managing Director and Directors.

Analysis:
1. Waiver of Pre-Deposit: The appellant sought waiver of pre-deposit of duty and penalty amounting to Rs. 2,77,61,571/- and Rs. 4,05,785/- respectively, citing the cessation of production as the reason for non-export. The appellant contended that the license issued did not impose specific export value conditions, and due to circumstances beyond their control, production ceased, leading to non-export of goods. The Tribunal acknowledged the absence of export value conditions in the license and noted that the letter of permission was valid for 10 years until August 16, 2006. Consequently, considering the prima facie strength of the appellant's case, the Tribunal waived the pre-deposit of duty and penalty for the appeal hearing.

2. Validity of License Conditions: The Revenue argued that the duty demand was justified as the appellant ceased manufacturing goods after importing capital goods without duty payment. However, upon examining the license and permission letter, the Tribunal found no stipulation regarding specific value or quantity-based exports within a specified period. As a result, the Tribunal concluded that the appellant had a strong case in their favor, leading to the waiver of pre-deposit for the appeal hearing.

3. Ex Parte Order and Remand: The impugned order was passed ex parte as the Managing Director and other Directors were in jail during the proceedings. In light of this, the Tribunal, with the consent of both parties, set aside the impugned order and remanded the matter to the Commissioner of Customs for fresh adjudication. The Tribunal directed the Commissioner to provide the appellant with a hearing opportunity, considering the circumstances of the Directors' non-appearance due to incarceration in other proceedings.

In conclusion, the Tribunal granted the waiver of pre-deposit, emphasized the absence of specific export value conditions in the license, and remanded the case for fresh adjudication due to the ex parte order and non-appearance of key individuals.