2014 (11) TMI 110 - AT - Customs

Waiver of pre-deposit - benefit of Notification No. 21/2002-Cus., dated 1-3-2002 - Held that - demand is raised by the jurisdictional Excise authorities in respect of the violation of conditions of the Customs Notification. As per the provisions of the Notification, there is no condition that the procedure under Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 are to be followed. In view of this, we find that prima facie, there is merit in the contention of the applicant. Therefore, pre-deposit of dues is waived and recovery thereof is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
Waiver of pre-deposit of customs duty, denial of benefit of Notification No. 21/2002-Cus., jurisdiction of Central Excise, applicability of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.

Analysis:
The applicant sought waiver of pre-deposit of customs duty, interest, and penalty amounting to Rs. 4,95,358/- after the demand was confirmed due to the denial of benefit under Notification No. 21/2002-Cus. The issue revolved around the contention that the goods in question, zippers and sliders, were not used in the manufacture of cotton made-ups as required by the Notification. The applicant argued that since the show-cause notice was issued by the jurisdictional Asstt. Commissioner of Central Excise, the demand raised by the Excise authorities was not sustainable as the applicant had not fulfilled the conditions of the Notification. The applicant relied on the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, stating that the Rules are applicable only where specifically mentioned in the Notification, which was not the case here.

The Revenue supported the lower authorities' findings, asserting that the condition of the Notification was not fulfilled, justifying the demand. However, the Tribunal found merit in the applicant's contention. The Tribunal noted that the demand was raised by the jurisdictional Excise authorities concerning the violation of the Customs Notification conditions. It was observed that there was no requirement in the Notification for following the procedure under the Rules, 1996. Consequently, the Tribunal held that the demand was not sustainable, and thus, the pre-deposit of dues was waived, and recovery stayed during the appeal's pendency. The Tribunal allowed the stay petition, providing relief to the applicant.

In conclusion, the Tribunal's decision favored the applicant by waiving the pre-deposit of customs duty, interest, and penalty due to the lack of fulfillment of Notification conditions and the absence of a requirement to follow the Rules, 1996. The judgment highlighted the importance of adhering to specific conditions in Notifications and clarified the jurisdictional aspects concerning the demand raised by Excise authorities.