2015 (12) TMI 173 - AT - Customs

Waiver of pre deposit - Misuse of Target Plus Scheme Licences - Customs Exemption Notification No. 32/2005-Cus. dated 08.04.2005 - Held that - Adjudicating authority in his order has clearly brought out the issues in detail on the misuse of license and the role played by each individual. The issues raised by the appellants on the role of High Seas Seller, receiving the finished products again, denying the cross objection by the adjudicating authority, to be examined at the time of final hearing. Therefore, we find that all the appellants have prima facie not made a case for waiver of pre-deposit. Upon compliance the pre-deposit of balance dues shall be waived and its recovery stayed during the pendency of the appeals. - Partial stay granted.

Issues involved:
Violation of provisions of Target Plus Scheme and Customs Exemption Notification, misuse of duty exemption licenses, imposition of duty, penalties, confiscation of goods, violation of natural justice, denial of cross-examination, role of High Seas Seller, waiver of pre-deposit.

Detailed Analysis:

1. Violation of Target Plus Scheme and Customs Exemption Notification:
M/s. J.P. Enterprises imported goods using non-transferable Target Plus Licences meant for 'Merchant Exporter' with actual user condition. They violated provisions by dispatching duty-free goods to job workers without declaring their names, conniving with others to misuse the scheme. Duties were imposed along with penalties and confiscation of goods under relevant Customs Act sections.

2. Role of High Seas Seller and Denial of Cross-Examination:
An appellant claimed to be a High Sea Seller, stating that cutting of goods post-import constitutes 'manufacture.' Alleged that no prejudice was caused to revenue, and requested waiver of pre-deposit. However, adjudicating authority imposed duties and penalties for imports at different ports, including on the appellant, citing violations of the law.

3. Violation of Natural Justice and Cross-Examination:
Shri Rajesh Gupta and Sushanta Kumar Chaudhuri alleged gross violation of natural justice as they were denied the opportunity for cross-examination of witnesses. They argued that the order mentioned no reason for disallowing cross-examination, and the order exceeded the scope of the show cause notice by alleging willful misstatement and suppression of facts.

4. Waiver of Pre-Deposit and Stay Applications:
Legal representatives of Shri Rajesh Gupta and Sushanta Kumar Chaudhuri requested a remand to the adjudicating authority based on principles of natural justice without pre-deposit. They contended that Shri Chaudhuri's role as an employee should exempt him from penalties. Various legal precedents were cited to support their arguments.

5. Adjudication by Tribunal:
After considering arguments from both sides, the Tribunal found detailed issues regarding license misuse and individual roles. The Tribunal directed appellants to make specific pre-deposits within a stipulated time, pending appeal. Compliance with the pre-deposit would lead to waiver of balance dues and stay on recovery during the appeal process.

This judgment by the Appellate Tribunal CESTAT CHENNAI addressed multiple legal issues surrounding the misuse of duty exemption licenses, violation of scheme provisions, denial of natural justice, and the roles of different individuals involved in the import process. The Tribunal emphasized the need for pre-deposit while allowing a stay on recovery during the appeal period, ensuring a fair adjudication process.

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