2006 (6) TMI 388 - AT - Customs

Summary

Issues:
1. Customs duty demand on Rosin Coated Sand imported by the applicants
2. Excise duty demand on RCS procured indigenously
3. Interpretation of Clauses in Customs and Excise Notifications
4. Prima facie case for waiver of pre-deposit of duties and penalties

Analysis:
1. The judgment deals with the confirmation of customs duty demand on Rosin Coated Sand (RCS) imported by the applicants for making moulds and cores used in manufacturing castings. The castings were entirely exported by the applicants as a 100% Export Oriented Unit (EOU). Additionally, excise duty demand was confirmed on RCS procured domestically for the same purpose.

2. The adjudicating authority relied on specific clauses in Notifications to justify the duty demands. Clause 7 of Notification 53/97-Cus. and Clause 5 of Notification 1/95-CE were cited, emphasizing the requirement to pay customs duty on imported RCS and excise duty on indigenously procured RCS as per the Notifications.

3. The Tribunal analyzed the relevant clauses in the Customs and Excise Notifications to interpret their applicability to the case. It was noted that the word "articles" in the Notifications should be understood as articles resulting from manufacture. The Tribunal found support for its interpretation in the decision of Hanil Era Textile Ltd., affirmed by the Apex Court, indicating that burnt sand's non-excisability is not relevant for imposing customs or excise duty on the applicants.

4. Considering the arguments presented and the interpretation of the Notifications, the Tribunal found a prima facie case for waiver of pre-deposit of customs duty, excise duty, and penalties. Consequently, the Tribunal dispensed with the pre-deposit requirements and stayed the recovery of the duties and penalties pending the appeals filed by the applicants.

This detailed analysis of the judgment highlights the key issues addressed, the legal interpretations made, and the decision rendered by the Tribunal regarding the duty demands and the waiver of pre-deposit for the applicants.