2010 (1) TMI 1070 - AT - Customs

Summary

Issues involved:
Confirmation of demand of Customs duty on raw materials and consumables used in production of Prawn Seed cleared into DTA during a specific period.

Detailed Analysis:
The issue in this case revolves around the confirmation of the demand of Customs duty on raw materials and consumables used in the production of Prawn Seed cleared into DTA during the period from 1994-95 to 1998-99. The Adjudicating Authority concluded that the appellant violated the provisions of Notification No. 196/94-Cus., dated 8-12-94.

The appellant's counsel argued that the show cause notice only demanded duty on the Prawn Seed cleared to DTA, not on the inputs. The counsel referenced a previous decision by the Tribunal in the case of Waterbase Ltd. v. CCE, Guntur, stating that the issue is covered by that decision. Additionally, the appellant was registered under BIFR, and as per the BIFR order, Customs authorities were barred from taking coercive action for recovery. The BIFR order dated 20-2-2006 was highlighted.

On the other hand, the Departmental Representative contended that the show cause notice explicitly mentioned the recovery of Customs duty on inputs/raw materials/consumables used in the manufacture of Prawn Seeds cleared to DTA. Reference was made to a decision of the Supreme Court in the case of Metal Box India Ltd. v. CCE, Mumbai, suggesting that pre-deposit is applicable even for sick industries under BIFR.

After considering the arguments from both sides and examining the records, the Tribunal found that the show cause notice indeed included a demand for Customs duty on raw materials/consumables imported duty-free for the production of Prawn Seeds cleared into DTA. The Tribunal also noted the BIFR order directing no coercive action against the company for non-payment of Customs duty while under BIFR for revival. As the Revenue failed to demonstrate any written submissions against the BIFR order, the Tribunal allowed the waiver of pre-deposit based on financial hardship due to the appellant's status as a sick unit under SICA.

In conclusion, the Tribunal allowed the application for waiver of pre-deposit of the amounts involved and stayed the recovery until the appeal's disposal, citing financial hardship as the primary reason for the decision.