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2014 (5) TMI 162 - HC - CustomsWaiver of pre-deposit - tribunal dismissed the appeal for non deposit of an amount as per stay order - Liability to pay import duty Non-fulfillment of export obligation - Held That - Tribunal found that there was no prima facie case and export obligation was not fulfilled in terms of the advance licence and the Customs Notifications by the petitioners and therefore, it came to a conclusion that the appellants are prima facie liable to pay the duty on the imported materials - Financial incapacity was not pleaded before the Tribunal by the petitioners - Tribunal in exercise of its discretion directed to pay only 50% of the duty - Unless the discretionary power exercised by the statutory authority is either perverse or arbitrary, this Court sitting under Article 226 would not interfere in such exercise of discretion - No record has been placed before this Court to establish as to whether the finding rendered by the Tribunal is either arbitrary or perverse - Assessees have not made out any case for interference by this Court Decided in favour of assesses.
Issues:
1. Adjudication of duty and penalty on exporters for non-fulfillment of conditions in advance licenses. 2. Appeal before Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and subsequent dismissal due to failure of pre-deposit. 3. Challenge to the Tribunal's order through writ petitions. Issue 1: Adjudication of Duty and Penalty The petitioners, exporters of Brass Art Wares, were granted advance licenses under Duty Exemption Entitlement Certificate (DEEC) by the Director General of Foreign Trade. However, they failed to fulfill the conditions in the advance licenses, leading to a show cause notice for customs duty and penalty. The Commissioner of Customs adjudicated the case, demanding significant sums towards duty and fines from the petitioners. The Tribunal, as the appellate authority, examined the factual and legal issues for granting stay. It found that the petitioners did not establish a prima facie case and that the export obligation was not fulfilled, leading to a direction to pay 50% of the duty. The Court held that unless the discretionary power exercised by the Tribunal is arbitrary or perverse, interference under Article 226 of the Constitution of India is not warranted. Issue 2: Appeal and Dismissal by CESTAT The petitioners appealed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) against the Commissioner of Customs' order. The Tribunal granted a stay but directed the petitioners to pre-deposit specified amounts within a stipulated time. However, as the petitioners failed to deposit the required sum within the deadline, their appeals were dismissed by the Tribunal. This dismissal led to the filing of the present writ petitions challenging the Tribunal's order. Issue 3: Challenge through Writ Petitions The writ petitions challenged the interim order passed by the Tribunal. The Court noted that the Tribunal, being the first appellate authority, had the right to examine both factual and legal issues for granting stay. It observed that the petitioners failed to establish a prima facie case and that the Tribunal's finding on non-fulfillment of export obligations was reasonable. As the petitioners did not demonstrate financial incapacity before the Tribunal and no arbitrariness or perversity was shown in the Tribunal's decision, the Court dismissed the writ petitions, upholding the Tribunal's order.
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