2014 (2) TMI 66 - AT - Customs

Import of rig - whether the appellants have not fulfilled the conditions of Notification 21/2002 Sr. No. 230 which requires them to use the imported rig for construction of road only - Held that - rig was used only for testing after overhauling and servicing we consider that it would be unfair to hold that the conditions of Notification have been violated. Therefore appellant have made out a prima facie case in their favour and accordingly pre-deposit is not required. In view of the above we waive the requirement of pre-deposit of duty and penalties and grant stay against recovery of the same during the pendency of the appeal - If they are not able to get the rig the violation of the condition of the Notification will continue and the rig will lie idle. On request the rig has been released on bank guarantee of Rs. 19 lakhs for full value. He assured that they would keep the bank guarantee alive. We find the bank guarantee sufficient. The appellant may be allowed to use the rig during the pendency of the appeal on the condition that the bank guarantee is kept alive - Stay granted.

Summary

Issues involved: Condonation of delay in filing appeal; Fulfillment of conditions of Notification 21/2002, Sr. No. 230 for using imported rig for road construction; Eligibility for exemption; Confiscation and redemption of rig.

Condonation of Delay in Filing Appeal:
The appellant sought condonation of an eight-day delay in filing the appeal. The Tribunal, comprising Shri B.S.V. Murthy and Ashok Jindal, JJ., examined the grounds for the delay and found them satisfactory. Consequently, the Tribunal granted condonation of the delay.

Fulfillment of Conditions of Notification 21/2002, Sr. No. 230:
The main issue revolved around whether the appellants complied with the conditions of Notification 21/2002, Sr. No. 230, which mandated the use of the imported rig solely for road construction. The impugned order alleged that the rig was utilized at the Delhi Metro Rail premises for boring activities. The appellant's advocate clarified that the rig was sent for testing after undergoing overhauling, with approximately 10,000 hours of prior usage. The Tribunal noted that the rig was used only for testing purposes post-servicing and overhauling. Considering this explanation, the Tribunal found it unjust to conclude that the Notification conditions were breached. Consequently, the appellant established a prima facie case in their favor, leading to the waiver of the pre-deposit requirement for duty and penalties, along with a stay against recovery during the appeal's pendency.

Confiscation and Redemption of Rig:
The advocate revealed that the rig had been confiscated and could be redeemed upon payment of a fine amounting to Rs. 40 lakhs. Concerns were raised about the rig remaining idle if not redeemed, leading to a continuation of the alleged Notification violation. To address this, the rig was released on a bank guarantee of Rs. 19 lakhs, equivalent to its full value, with an assurance to maintain the bank guarantee. The Tribunal deemed the bank guarantee adequate and permitted the appellant to utilize the rig during the appeal proceedings, contingent upon the bank guarantee's validity.

This comprehensive analysis of the judgment highlights the Tribunal's considerations regarding the delay in filing the appeal, compliance with Notification conditions, and the redemption of the confiscated rig, providing a detailed overview of the legal issues addressed and the Tribunal's decisions on each matter.