2013 (4) TMI 187 - AT - Customs

Waiver of pre-deposits - The applicants in these stay petitions imported textile machines claiming benefit of Notification No. 103/2009-. After clearance the officers of Revenue received intelligence that there was a manipulation in the description of the machines which was done for availing Technology Up-gradation Fund Scheme (TUF Scheme). Revenue initiated action for confiscating the goods under Customs Act and also denying the concessional rate of duty prescribed in Notification and proposing penalty on the importer and redemption fine in lieu of confiscation has been imposed, since the goods have been already released provisionally to the parties. Held that Prima facie the mis-declaration, if any, made by the applicants are not resulting in any short levy of duty or contravention of import policy. At best there may be contravention of declaration given to the DGFT at the time of obtaining the EPCG licenses. So far DGFT has not cancelled the licenses. Only Show Cause Notice has been issued. We have not been able to appreciate how the applicants could have availed TUF Scheme because under para 5.8 of the policy to avail that scheme new machines have to be imported. The Show Cause Notice or the adjudication order does not bring out the legal provisions contravened or the undue benefit claimed. It only states that there were misdeclarations of model number and year of make, of the machines. - stay granted in full.

Summary

Issues:
Stay applications related to import of textile machines under Notification No. 103/2009-Cus., confiscation of goods, differential duty confirmation, penalties imposition, intention to avail Technology Up-gradation Fund Scheme (TUF Scheme), mis-declaration allegations, contravention of Notification No. 103/2009-Cus., pre-deposit waiver.

Analysis:
The case involved 40 stay applications concerning the import of textile machines under Notification No. 103/2009-Cus., where the Revenue alleged manipulation in the description of machines to avail the TUF Scheme. The officers detected discrepancies in model numbers and year of manufacture, leading to actions for confiscation, denial of concessional duty rate, and penalty imposition. The appellants denied intending to benefit from the TUF Scheme, arguing their duty payment choice proved their stance. They claimed no mis-declaration and challenged the penalties and confiscation. The Revenue contended the obvious intention to claim TUF Scheme, citing mis-declarations in Bills of Entry and a DGFT license cancellation proposal. The AR emphasized potential revenue loss if not intervened, justifying the penalties and confiscation.

The Tribunal analyzed the arguments, finding no short levy of duty or import policy contravention due to mis-declarations. It questioned the feasibility of availing the TUF Scheme based on the machine's declared age. The Tribunal observed no clear contravention of legal provisions or undue benefits claimed, primarily noting misdeclarations without specifying legal breaches. Considering the executed bonds and bank guarantees, the Tribunal waived the pre-deposit requirement for all parties, emphasizing the lack of current maintainability for duty demands and confiscation. The Tribunal allowed the stay petitions under the specified conditions, ensuring bond and bank guarantee maintenance during the appeal process.