2006 (12) TMI 250 - AT - Customs

Waiver of pre-deposit - Duty drawback - The finding regarding non-export to Russia has been reached based on a letter from the Indian Embassy in Moscow, that the appellant s buyers either did not exist at all or they had not carried out any import transaction - Held that demand for return of drawback amounts merely on the ground of non-export to Russia may not be sustainable - waiver is granted in regard to demands made on the ground of non-export There is evidence supporting the revenue s finding that some of the export consignments had been grossly over valued. Therefore, the appellant is directed to make a deposit of Rs. 2.5 crores within a period of 8 weeks from today - Appeal is dismissed

Summary

Issues:
Stay applications seeking waiver of pre-deposit for demands, penalties; Dispute over drawback amount of over Rs. 22 crores for exports to Russia; Allegation of overvaluation of export consignments leading to excess payment of drawback.

Analysis:
The stay applications before the Appellate Tribunal CESTAT, NEW DELHI sought waiver of the requirement for pre-deposit of demands and penalties made under the impugned order. The primary issue revolved around the demand for the return of over Rs. 22 crores paid to the applicants as drawback amount concerning exports made to Russia. The demand was based on the contention that the consignments in question did not actually reach Russia and that some consignments were overvalued, resulting in excess payment of drawback.

The appellants argued that the export of goods from India was undisputed, as the consignments had left India and reached Finland, emphasizing that drawback is payable upon export from India regardless of the goods' landing at the destination. They also contended that the revenue erred in concluding that the goods did not reach Russia, presenting evidence that the goods were sent from Finland to Russia by road. Additionally, they highlighted that the exports were under a special scheme of exports under rupee payment towards outstanding debt owed to Russia, with payments received from Russian banks and satisfaction from commercial banks and RBI.

The Tribunal noted that while the finding of non-export to Russia was based on a letter from the Indian Embassy in Moscow, the reliability of this evidence was questioned as the appellants produced letters from Russian authorities certifying the importers' registration and other details. Furthermore, correspondence confirmed the movement of some consignments from Finland to Russia. Consequently, the Tribunal found the demand for the return of drawback amounts solely on the ground of non-export to Russia may not be sustainable, granting waiver in this regard.

However, a different stance was taken concerning the issue of overvaluation of exports. Evidence supported the revenue's finding that some export consignments were grossly overvalued, leading to a direction for the appellant to deposit Rs. 2.5 crores within eight weeks. Failure to comply with this directive would result in the dismissal of the appeals. The Tribunal scheduled a reporting compliance date for the matters and ordered the stay applications accordingly, emphasizing the need for the deposit within the stipulated period to avoid dismissal of the appeals.