2008 (7) TMI 635 - AT - Customs

Adjudication - Jurisdiction - Stay/Dispensation of pre-deposit - Hearing - Early hearing - Words and Phrases

Summary

Issues involved:
1. Recovery of duty under Section 28(2) of the Customs Act
2. Confiscation of goods under Section 111 of the Customs Act
3. Imposition of fines and penalties under various sections of the Act
4. Jurisdictional objection regarding the authority to recover Customs duty
5. Evidence of imported material being used for intended purpose
6. Waiver of pre-deposit and stay of recovery
7. Out-of-turn disposal of the appeal due to a new show-cause notice

Analysis:

1. The Commissioner of Customs ordered the recovery of duty amounting to over Rs. 71 lakhs from the appellants under Section 28(2) of the Customs Act, denying them the benefit of Customs Notification 32/97-Cus. for betel nuts imported and cleared in 2005. Additionally, the goods were held liable for confiscation under Section 111 of the Customs Act, and a fine of Rs. 10 lakhs was imposed under Section 125. Penalties were also imposed under Section 112 on the importer and partners of the firm. The appellants argued that the imported raw material was used for manufacturing tannin for an overseas customer in compliance with the Customs Rules and Notifications. They provided documents to support their claim, including job work orders, clearance documents, and certificates from the Central Excise authorities.

2. The appellants contested the jurisdiction of the Commissioner of Customs to pass the order, claiming that the authority to recover Customs duty forgone due to non-use of imported raw material was with the Central Excise authorities. The Tribunal rejected this argument, stating that the power to recover Customs duty under Section 28(1) lies with the proper officer of Customs, and the Commissioner of Customs has the authority to adjudicate on such matters. The jurisdictional objection raised by the appellants was overruled.

3. The Tribunal examined the evidence and found that the imported betel nuts were indeed used in the factory for manufacturing tannin, and the finished goods were cleared for export. Contrary to the Commissioner's findings of waste generation, the Tribunal did not find any evidence to support such claims. As a result, the Tribunal granted a waiver of pre-deposit and stayed the recovery of duty and penalties.

4. Due to a new show-cause notice demanding duty amounting to Rs. 20 crores for previously imported betel nuts, the appellants requested an out-of-turn disposal of the appeal. The Tribunal agreed that the circumstances warranted expedited handling and scheduled the appeals for final hearing on a specific date.

This detailed analysis covers all the issues involved in the legal judgment, providing a comprehensive understanding of the Tribunal's decision and the arguments presented by the parties involved.