2007 (10) TMI 417 - HC - Customs

Waiver of pre-deposit - The Respondents found that the Appellants were sending the goods to Moscow via Finland. Although the goods may have left India and reached the destination, they were the Appellants received drawback benefits to the extent of Rs. 22 crores - On this basis the Revenue raised a demand against the Appellants for Rs. 22 crores and then confirmed it after adjudication - Against the order requiring the Appellants to refund the drawback amount, they preferred an appeal before the Tribunal which as already noticed required them to make a pre-deposit of Rs. 2.5 crores as a condition for hearing the appeal. Since the Appellants did not deposit the amount, the Tribunal by the impugned order dated 26th March, 2007 dismissed the appeal - No substantial question of law arises for determination.

Summary

Issues:
1. Challenge against the order of pre-deposit by the Tribunal.
2. Allegation of overvaluing exported garments.
3. Demand raised against the Appellants for drawback benefits.
4. Appeal against the order to refund the drawback amount.
5. Grounds for dismissing the appeal.

Analysis:
The appeal before the High Court was against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, which required the Appellants to make a pre-deposit of Rs. 2.5 crores for the hearing of their appeal. The Tribunal had dismissed the appeal as the amount was not deposited. The Appellants sought time to deposit a reduced amount, but the Court was not inclined to grant further time and proceeded to dismiss the appeal.

The main allegation against the Appellants was that they were overvaluing exported garments to potentially gain benefits based on the inflated export value. The Revenue found that the Appellants had received drawback benefits amounting to Rs. 22 crores by sending goods to Moscow via Finland. Despite being required to return the money, the Appellants did not comply, leading to the demand raised against them.

The Appellants had appealed the order to refund the drawback amount, but the Tribunal had mandated a pre-deposit of Rs. 2.5 crores for hearing the appeal. As the Appellants did not deposit the amount, the Tribunal dismissed the appeal, which was upheld by the High Court. The Court found no grounds to interfere with the Tribunal's orders, noting that the Appellants had benefitted significantly and could have deposited the required amount.

In conclusion, the High Court dismissed the appeal, stating that no substantial question of law arose for determination in this case. The judgment highlighted the Appellants' enrichment by Rs. 22 crores and their failure to comply with the Tribunal's pre-deposit requirement, leading to the dismissal of the appeal.