2006 (10) TMI 302 - AT - Customs

Summary

Issues:
1. Waiver of pre-deposit of duty amount and penalties demanded from the appellant.
2. Allegations of violation of customs regulations regarding the import and use of Chinese metallurgical coke.
3. Discrepancies in production records and consumption of nut coke in blast furnaces.

Analysis:
1. The case involves applications for the waiver of pre-deposit of duty and penalties totaling Rs. 80,11,883 demanded from the appellant, M/s. Sesa Industries Ltd., and others. The duty amount and penalties were imposed under Section 114(A) of the Customs Act, 1962, by the Commissioner in an impugned order.

2. The dispute arises from the import of Chinese metallurgical coke by the appellant under advance licenses. The Commissioner alleged that the appellant violated Notification No. 51/2000 by transferring nut coke generated from the Chinese coke, which was not permitted under the rules. The Commissioner contended that the appellant manipulated production records to show consumption of nut coke in the blast furnace.

3. The appellant argued that they followed a technology allowing the use of nut coke in the blast furnace, supported by expert opinions. They claimed that the production reports substantiated the consumption of nut coke. However, the Department presented evidence suggesting manipulation of production records and non-consumption of nut coke. Discrepancies in the production reports and records of nut coke consumption were highlighted.

4. After considering the submissions, the Tribunal found that the appellant failed to establish a prima facie case for complete waiver of pre-deposit. The Tribunal directed the appellant to pre-deposit Rs. 20.00 lakhs towards duty within a specified period. Compliance would result in the waiver of the remaining duty amount and penalties, with recovery stayed until the appeals were disposed of. Non-compliance would lead to the vacation of stay and dismissal of appeals.

In conclusion, the Tribunal's decision required the appellant to make a partial pre-deposit of duty, emphasizing the need for compliance with the specified directive to avoid adverse consequences. The case underscores the importance of accurate record-keeping and adherence to customs regulations in import-related matters to avoid penalties and disputes.