2008 (9) TMI 710 - AT - Customs

Summary

Issues: Penalties imposed for failure to follow procedure prescribed by Central Board of Excise & Customs in SEZ for obtaining castor oil for export.

In this judgment by the Appellate Tribunal CESTAT, Ahmedabad, the issue at hand pertains to penalties imposed on the appellants for not adhering to the prescribed procedure by the Central Board of Excise & Customs in Special Economic Zones (SEZ) for acquiring castor oil for export purposes. The appellants obtained castor oil from domestic units for export, leading to the imposition of penalties. The advocates for the appellants argued that the SEZ units would only benefit from fulfilling the value addition requirement for exports and that the violation was related to procedural aspects. They highlighted that Trisuns Chemical Industries Ltd. had obtained permission from the Development Commissioner for trading activities. On the other hand, the Revenue representatives contended that there was indeed a breach of the prescribed procedure by the Board, emphasizing that permission to procure goods from the domestic tariff area was not automatic and depended on the appellants' past performance. They indicated that permission could be denied if the appellants had previous offenses.

During the proceedings, it was acknowledged that a detailed examination of the specifics would be necessary at the final hearing. Given that the units were engaged in exports, there was no direct revenue loss for the Revenue, and the goods had been successfully exported, the Tribunal deemed it appropriate to grant an unconditional stay on the recovery of the penalty amounts imposed on all the appellants during the appeal process. This decision was made to ensure that the appellants were not unduly burdened during the pendency of the appeals, considering the nature of the violations and the absence of revenue implications for the government. The judgment was pronounced in an open court session, reflecting the Tribunal's impartial and transparent approach to resolving the matter at hand.