2014 (8) TMI 77 - AT - Customs

Classification of goods - Mis declaration of goods - Import of rough dolemite stone blocks or rough marble blocks - Confiscation of goods - Redemption fine - Held that - Once this Tribunal has passed an order granting stay against recovery of penalties and waiving the requirement of pre-deposit of penalties, there is no question of recovery of any amount under the Head of penalties or duties from the appellants. Only the amount that the department is entitled to recover would be the redemption fine which is covered by the bank guarantee. The bank guarantee is executed only to safeguard the quantum of redemption fine and once the duties and penalties are stayed, the right course for the revenue is to encash the bank guarantee to the extent of the amount of redemption fine and allow the balance amount. In view of the above discussion, we find that this application has to be allowed and the concerned Commissioner is required to be directed to encash the bank guarantee to the extent of redemption fine and bank guarantee for the rest of the amount cancelled - Decided partly in favour of assessee.

Summary

Issues:
1. Application seeking intervention of the Tribunal under Rule 41 of Customs, Excise and Service Tax Appellate Tribunal Procedure Rules.
2. Dispute regarding import of Rough Dolemite Stone Blocks versus Rough Marble Blocks.
3. Confiscation of goods, imposition of fines, and demand for differential duty.
4. Granting of waiver of pre-deposit and stay against recovery of penalties.
5. Rejection of request to pay redemption fine using bank guarantee.
6. Direction for encashment of bank guarantee for redemption fine.

Analysis:
1. The judgment pertains to an application seeking the Tribunal's intervention under Rule 41 of the Customs, Excise, and Service Tax Appellate Tribunal Procedure Rules. The appellant had imported Rough Dolemite Stone Blocks, but the department alleged the importation of Rough Marble Blocks, leading to proceedings for mis-declaration and under-valuation. This resulted in the confiscation of goods, imposition of fines, and a demand for differential duty.

2. The Tribunal had previously granted a waiver of pre-deposit and stay against the recovery of penalties in a prior order. Despite this, a bank guarantee amounting to a significant sum was still pending with the department. The appellant's request to utilize the bank guarantee to pay the redemption fine was denied by the Commissioner of Customs, prompting the filing of the current application.

3. The Tribunal, in its analysis, emphasized that once penalties and duties were stayed, the only recoverable amount for the department would be the redemption fine covered by the bank guarantee. The Tribunal directed the Commissioner to encash the bank guarantee to the extent of the redemption fine and cancel the guarantee for the remaining amount. The Commissioner was mandated to comply with this directive within a month from the date of communication of the order.

4. The judgment underscores the importance of adhering to the Tribunal's previous orders regarding the waiver of pre-deposit and stay against penalties. It clarifies the purpose of the bank guarantee in safeguarding the redemption fine and provides a clear directive for its utilization in the specific context of the case. The decision aims to ensure compliance with the Tribunal's rulings and streamline the process of recovering the entitled amount while protecting the appellant's interests.