2010 (12) TMI 596 - AT - Customs

Demand - Notification No. 224/85-Cus., dated 9-7-1985 - A demand cum show cause notice therefore, was issued to the appellant to pay the differential customs duty of Rs. 10,94,765/- for non-production of end use certificate, which was confirmed vide OIO dated 21-6-1995 - there is no condition as regards the production of end use certificate or satisfaction of the Central Excise authorities as regards use of imported material in the leather industry - Held that appellants have a good prima-facie case in their favour so as to dispense with the condition of pre-deposit of duty - Decided in favour of the assessee by way of remand Commissioner(A)

Summary

Issues:
1. Dismissal of appeal for non-compliance with stay order directing deposit of a specific amount.
2. Duty exemption under Notification No. 224/85-Cus. and requirement of end use certificate.
3. Appellant's efforts to obtain end use certificate and challenges faced.
4. Discrepancy between notification requirements and Commissioner's observations.
5. Decision on stay petition and remand for decision on merits without pre-deposit.

Issue 1:
The Commissioner (Appeals) dismissed the appeal due to non-compliance with the stay order, which directed the appellants to deposit Rs. 5,47,383 out of the total confirmed duty of Rs. 8,77,567 as a condition for hearing their appeal. The Tribunal found this action by the Commissioner to be incorrect.

Issue 2:
The appellant imported material for the leather industry seeking duty exemption under Notification No. 224/85-Cus. The dispute arose regarding the non-production of an end use certificate, leading to a demand for differential customs duty. The appellant argued that the notification did not mandate the satisfaction of Central Excise authorities or the production of an end use certificate at the time of import.

Issue 3:
The appellant made efforts to obtain the end use certificate but faced challenges, as the jurisdictional Central Excise officer refused to provide it due to the appellant's small scale manufacturer status. The appellant submitted a Chartered Accountant's certificate and an affidavit to support their claim that the imported materials were used in manufacturing leather goods.

Issue 4:
The Tribunal observed that the notification did not require the production of an end use certificate or satisfaction of Central Excise authorities regarding the material's use in the leather industry. The Commissioner's insistence on the end use certificate was deemed factually incorrect and against the notification's provisions.

Issue 5:
After considering both parties' submissions and reviewing the notification, the Tribunal concluded that the appellants had a prima facie case in their favor to dispense with the pre-deposit of duty. The Tribunal allowed the stay petition, set aside the impugned order, and remanded the matter to the Commissioner (Appeals) for a decision on merits without requiring any pre-deposit.

This comprehensive analysis of the legal judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's decision on each issue, ensuring a detailed understanding of the case.