2012 (10) TMI 653 - AT - Customs

Waiver of pre-deposit - denial of benefit of Notification No. 32/2005-Cus. import of continuous cast copper rods actual user condition - nexus between import and export - Held that - Condition attached to each of these certificates/licences was that the imports must have broad nexus with the two export product groups viz. (i) Chemicals and allied products (ii) Engineering products - paragraph 3.2.5 of the Handbook of Procedures required a broad nexus with the export product in the sense that any one or more items of the export product group specified in the certificate/licence could be exported by the importer so as to claim the benefit of the exemption notification - waiver of pre-deposit and stay of recovery of penalties are also granted

Issues:
1. Waiver of pre-deposit and stay of recovery applications.
2. Denial of benefit of Notification No. 32/2005-Cus. to the appellants.
3. Compliance with conditions of duty-free entitlement certificates under the Target Plus Scheme.
4. Interpretation of the term "broad nexus" in the Handbook of Procedures.
5. Application of judgments by the Hon'ble High Court and Supreme Court in similar cases.
6. Consideration of actual usage of imported items by the appellants.
7. Validity of Board's Circulars in relation to the case.
8. Prima facie case against the demand of duty and penalties.

Analysis:

1. The judgment pertains to applications seeking waiver of pre-deposit and stay of recovery concerning amounts adjudged against the appellants. The matter was remanded by the Hon'ble High Court for fresh consideration in light of a Supreme Court decision, necessitating a review of the stay applications.

2. The main appellants were denied the benefit of a customs notification for imported copper rods, leading to demands for duty and penalties. The appellants, as 'Star Exporters' under the Target Plus Scheme, had obtained duty-free entitlement certificates from the DGFT. The denial was based on a lack of nexus between the imported items and the export product groups specified in the certificates.

3. The imports were made under the Target Plus Scheme, requiring a nexus between the imported items and the chosen export product groups. The appellants claimed the benefit of a customs notification for duty exemption, subject to specific conditions, including the installation certification of capital goods. The department contended non-compliance with these conditions.

4. The appellants argued that a recent Bombay High Court judgment interpreted the term 'broad nexus' differently, allowing duty exemption if the imported item and export product fell within the same product group. They challenged the reliance on Circulars by the adjudicating authority and sought waiver based on the High Court's ruling.

5. The Tribunal considered the High Court's judgment, emphasizing the need for a broad nexus with the export product group for duty exemption. It noted the conflicting views with the Commissioner's interpretation and the striking down of Circulars, leading to a prima facie case in favor of the appellants.

6. The issue of actual usage of the imported items by the appellants was raised by the Revenue, questioning the fulfillment of conditions for duty exemption. The Tribunal found no conclusive evidence of non-compliance with the actual usage condition.

7. The Tribunal acknowledged the ongoing legislative steps regarding a relevant customs notification and the jurisdictional objections raised by the appellants. It highlighted the importance of considering the merits of the case and the applicability of judicial precedents in determining the waiver of pre-deposit and stay of recovery.

8. Ultimately, the Tribunal granted waiver of pre-deposit and stay of recovery concerning the duty demanded by the Commissioner, citing the appellants' prima facie case against the demand. The appeals were directed to be expedited for further proceedings.

This detailed analysis covers the various issues addressed in the judgment, providing a comprehensive understanding of the legal complexities and arguments presented by the parties involved.

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