2008 (4) TMI 594 - AT - Customs

Summary

Issues: Stay applications arising from common Orders-in-Appeal seeking stay of operation of order due to refund amounts being proceeded for recovery. Contention regarding export cess payment in terms of Customs Act, 1962 post its abolishment. Argument about collecting cess prior to abolishment and requirement of depositing the same with the Department.

In the judgment delivered by the Appellate Tribunal CESTAT, BANGALORE, the stay applications stemmed from common Orders-in-Appeal seeking a stay of the operation of the order, as the refunded amounts were being pursued for recovery. The appellants argued that they were not obligated to pay export cess under Section 27 of the Customs Act, 1962 for Rice exports post the Act's abolition on 1-6-2006. They contended that the refund granted by the Original Authority was lawful, as the cess was not required post the Act's repeal. The Commissioner (Appeals) erred in asserting that the cess was payable despite the Act's non-existence. On the other hand, the Respondent's JDR argued that the contract was entered into before the Act's abolishment, and they had already collected the cess, necessitating its deposit with the Department.

The Tribunal opined that the JDR's argument lacked merit at this juncture. They emphasized that a levy without legal justification could not be upheld when no law was in place. The appellants seemed to have a strong case on merits, and due to the numerous appeals stemming from the impugned order, a common hearing was scheduled for 14th July, 2008. The stay applications were granted, ensuring no recovery even after 180 days of the stay order in line with rulings from the Apex Court, High Court, and Tribunal. The judgment highlighted the importance of legal justifications and the absence of a law to support the levy, ultimately leading to the allowance of the stay applications and the setting of a common hearing date for the appeals.