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2013 (8) TMI 620 - AT - CustomsDisguised Attempt to Export - Department was of the view that assesse had attempted to export 166 MTs of Muriate of Potash in the guise of industrial salt - Held that - It was quite clear that Agriculture Department, Government of Karnataka treated it as only Muriate of Potash and buyers purchased the item in auction believing that it was Muriate of Potash and there was no evidence that they subsequently complained that it was not Muriate of Potash and the buyers also got the samples tested and even then they have not complained - It cannot be said that the Agriculture Department, Government of Karnataka officers did not know what is Muriate of Potash. Waiver of pre-deposit Assesse was unable to prove prima facie case - Assesse had not been able to make out justification for reducing the requirement of deposit of 50% of penalty in his case by making an exception - 7.5 Lakhs were ordered to be submitted as pre deposit - rest of the duty to be waived till the disposal - stay granted.
Issues:
1. Observance of principles of natural justice and access to documents. 2. Determination of the nature of the exported goods - Muriate of Potash or industrial salt. 3. Justification for reducing the penalty amount required to be deposited. Issue 1: Observance of principles of natural justice and access to documents: The appellant claimed that principles of natural justice were not observed as he was not provided with a copy of the lab report. However, the appellant admitted to attempting to export Muriate of Potash in the guise of industrial salt. The appellant's defense was based on the argument that the water-soluble percentage of Potassium in the product was below the required level for Muriate of Potash. The Tribunal noted the contradiction in the appellant's stand regarding the lab report and the percentage of Potassium Chloride. The delay in requesting documents and lack of specific challenges by the appellant led the Tribunal to conclude that the report related to two samples would be more appropriate. The Tribunal also highlighted the appellant's delayed response to the show-cause notice, questioning the quality of representation and the appellant's claim of non-observance of natural justice. Issue 2: Determination of the nature of the exported goods - Muriate of Potash or industrial salt: The Tribunal considered the significance of exporting Muriate of Potash, a fertilizer with a higher international market price, intended for farmers at subsidized rates, and the impact of such actions on the farming community. Despite the appellant's claims, statements from the Agriculture Department and the actions of buyers in auctions indicated that the exported goods were perceived and treated as Muriate of Potash. The Tribunal found that the appellant failed to establish a prima facie case that the exported goods were industrial salt, emphasizing the importance of the Agriculture Department's expertise in identifying Muriate of Potash. Issue 3: Justification for reducing the penalty amount required to be deposited: The Tribunal compared the present case with a previous case involving the export of Muriate of Potash and noted the standard requirement of depositing 50% of penalties imposed. The appellant failed to provide sufficient justification for reducing the penalty deposit amount. Consequently, the Tribunal ordered the appellant to deposit Rs. 7.5 lakhs within a specified period, with the stay against recovery granted upon compliance. The Tribunal emphasized the seriousness of diverting Muriate of Potash meant for farmers and rejected the appellant's plea for a waiver based on a different case involving RAM cards. This detailed analysis of the judgment from the Appellate Tribunal CESTAT Bangalore highlights the issues surrounding the observance of natural justice, the determination of the nature of the exported goods, and the justification for reducing the penalty amount. The Tribunal's thorough examination of the appellant's arguments, the evidence presented, and the precedents cited resulted in a comprehensive decision addressing each issue raised in the case.
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