2014 (1) TMI 324 - AT - Central Excise

Goods cleared by EOU to DTA - Benefit of the Export Import Policy to made available without having valid permission from DGFT Held that - The issue is arguable one and needs to be considered from various angles - the DGFT have not given a clean chit to the appellant as regards the permission for DTA clearance - invocation of extended period of time is incorrect - as an EOU, appellant has been regularly filing the returns with authorities which indicated clearance effected, from their EOU - the show cause notice issued to the appellant would cover demand within the limitation period Assessee is directed to deposit an amount of Rs.5 lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues: Stay petitions for waiver of pre-deposit of duty demand, penalty, and interest amounts; Validity of duty liability on goods cleared into DTA without permission from DGFT; Invocation of extended period for duty liability; Compliance with deposit conditions for appeal disposal.

In the judgment by the Appellate Tribunal CESTAT AHMEDABAD, the stay petitions were filed by the appellants, M/s. Schurter Electronics (India) Pvt. Ltd. and Shri Azaz Lokhandwala, seeking a waiver of pre-deposit of duty demand, penalty, and interest amounts. The duty liability on goods cleared into DTA without valid permission from the Directorate General of Foreign Trade (DGFT) was confirmed by lower authorities for the period from October 2005 to November 2009. The counsel for the appellants argued that the duty liability fell beyond the period of limitation as the show cause notice was issued on 28.07.10, and monthly returns indicated duty discharge as per the EOU duty structure. The Tribunal found the issue to be arguable, noting that DGFT did not provide clearance for DTA clearance. However, they agreed with the counsel that the invocation of the extended period was incorrect. The Tribunal directed M/s. Schurter Electronics (India) Pvt. Ltd. to deposit Rs.5 lakhs within eight weeks and report compliance before the Deputy Registrar for further orders. Compliance would allow for the waiver of pre-deposit of the remaining balance amounts, with recovery stayed until appeal disposal.

The Tribunal considered the merits of the case, acknowledging the arguable nature of the issue regarding duty liability for goods cleared into DTA without proper permission. While the DGFT did not provide a clean chit, the Tribunal agreed with the appellant's counsel that the extended period should not be invoked. The appellant's regular filing of returns as an EOU, indicating clearance to DTA, was noted. However, for the period from April 2009 to March 2010, the show cause notice fell within the limitation period. Given the arguable nature of the issue, the Tribunal imposed a deposit condition on M/s. Schurter Electronics (India) Pvt. Ltd., directing them to deposit Rs.5 lakhs within eight weeks for further proceedings. Compliance with this condition would allow for the waiver of pre-deposit of the remaining amounts, with recovery stayed until the appeal is disposed of.

The judgment emphasized the importance of compliance with deposit conditions for the appeal's disposal. M/s. Schurter Electronics (India) Pvt. Ltd. was directed to deposit Rs.5 lakhs within eight weeks and report compliance to the Deputy Registrar for further orders. Compliance with this condition would enable the waiver of pre-deposit of the remaining amounts, with recovery stayed until the appeals are finally disposed of. The Tribunal's decision aimed to balance the interests of the appellant and the authorities, ensuring a fair consideration of the case while upholding procedural requirements.