2013 (5) TMI 520 - AT - Customs

Waiver of pre deposits Benefit of Notification No.21/2002-Cus is denied - Duty demanded - Aggrieved by the order appellant preferred an appeal to the Commissioner (Appeals) and same directed them to pre-deposit the amount, which they did not deposit. Accordingly the appeal is dismissed for non-compliance with Section 129E - As per appellant pre deposit will cause financial hardship. Held that - Appellant has endeavored to set up financial hardships as a ground for substantial reduction of the amount for pre-deposit. In this connection, he has referred to profit and loss account as on 31.3.2011, balance sheet as on 31.3.2011, etc. we find a marked improvement of the financial position of the company. This apart, the income tax records indicating the latest financial status of the company at least as on 31.3.2012 are not forthcoming. The above records cannot be considered to reflect the latest financial position of the company. If the aforesaid trend of improvement of financial status from 2010 to 2011 has continued for 2012 and 2013, their financial position as on today will be much much better. In the above view of the matter, we would expect the appellant to pre-deposit the amount to enable the Commissioner (Appeals) to dispose of their appeal on merits. Thus, appeal stands allowed by way of remand.

Summary

Issues:
Waiver of pre-deposit and stay of recovery in respect of adjudged dues involving Notification No.21/2002-Cus. [Sl. No. 30(I)(B)] for palm kernel oil of industrial grade.

Analysis:
The appellant sought waiver of pre-deposit and stay of recovery for the duty demanded in relation to palm kernel oil of industrial grade under Notification No.21/2002-Cus. [Sl. No. 30(I)(B)]. The appellant initially claimed the benefit of a different notification but later sought concessional rate of 12.5% as basic customs duty under Sl. No. 30(I)(B). Samples of the goods were tested by National Institute of Technology (Karnataka) and the Customs House, with conflicting results on Free Fatty Acid (FFA) content. The appellant requested retests and cross-examination of the Chemical Examiner, but the benefit of the notification was denied based on the initial test results showing FFA content less than 20%. The demand for duty was confirmed against the importer by the original authority.

The party appealed to the Commissioner (Appeals) and applied for waiver of pre-deposit, which was partially granted with a requirement to deposit Rs.12 lakhs. As the amount was not deposited, the appeal was dismissed for non-compliance with the Customs Act. The present appeal challenges the appellate Commissioner's order.

The appellant contended that the test results from NIT-K and Cochin Customs House Laboratory should not be relied upon, as they sought to cross-examine the Chemical Examiner. However, the Tribunal found no prima facie case for the appellant against the duty demand. Financial hardships were raised as a ground for reduction of pre-deposit amount, supported by financial documents showing an improvement in the company's financial position. The Tribunal acknowledged the plea but required the appellant to pre-deposit Rs.9,00,000 to enable the Commissioner (Appeals) to hear the appeal on merits.

In conclusion, the Tribunal allowed the appeal by way of remand, directing the appellant to deposit the specified amount within seven weeks for further proceedings before the Commissioner (Appeals). The stay application was also disposed of in light of the decision.