2009 (3) TMI 829 - AT - Customs

Summary

Issues:
1. Stay petition against waiver of customs duty, excise duty, and penalty.
2. Interpretation of conditions of export obligation for duty demand on capital goods and raw materials.
3. Financial crisis leading to inability to pay the demanded amounts.
4. Validity of new grounds in appeal stage.
5. Expiry of EOU status and non-fulfillment of export obligation.
6. Consideration of severe financial hardship for waiver of pre-deposit.

Analysis:
The appellant filed a stay petition against the waiver of customs duty, excise duty, and penalty. The appellant argued that duty demand on capital goods should not apply as the goods were put to use, citing a previous Tribunal decision. Regarding duty on raw materials, the appellant contended that duty should only apply to the balance amount in stock, not the entire quantity. The appellant also highlighted severe financial crisis due to the unit being taken over by the Debts Recovery Tribunal for repayment of bank dues, making it impossible to pay any amount.

The revenue, represented by the special counsel, opposed the appellant's arguments, stating that new grounds in the appeal stage are not permissible. They emphasized that the EOU status had expired, and the Development Commissioner confirmed non-fulfillment of export obligation, justifying duty payment foregone by the revenue on capital goods and raw materials.

After considering both sides' submissions, the Tribunal found in favor of the appellant on the duty demand for capital goods based on the precedent cited. The Tribunal also noted the severe financial hardship faced by the appellant, as evidenced by the bank's actions through the Debts Recovery Tribunal. Consequently, the Tribunal allowed the application for waiver of pre-deposit due to financial hardship, staying the recovery until the appeal's disposal. The appeal was scheduled for final hearing on a specified date.

In conclusion, the Tribunal's decision centered on the interpretation of export obligation conditions, financial crisis impact on payment ability, and the validity of new grounds in appeal. The judgment balanced legal precedents, financial circumstances, and statutory obligations to grant relief to the appellant based on severe financial hardship.