2015 (12) TMI 651 - AT - Customs

Waiver of pre deposit - Import of parts of Switches and paid concessional rate of duty under exemption notification No. 25/09-Cus dated 28.02.1999 - Assessee did not fulfill all the conditions - Held that - As per the condition of the exemption Notification, the imported goods would be used in the registered premises of the applicant. In the present case, the applicant failed to comply with the condition of the Notification as they have sent the imported goods to their other unit in Una, which is not registered for the purpose of the availment of concessional rate of duty under Notification 25/09-Cus. So, the applicant failed to make out a prima-facie case for waiver of pre-deposit of entire amount of duty alongwith interest and penalty - Partial stay granted.

Issues:
1. Application for waiver of pre-deposit of duty.
2. Compliance with exemption notification conditions.
3. Denial of concessional rate of duty.
4. Upholding of adjudication order by Commissioner (Appeals).

Analysis:
1. The applicant filed an application seeking waiver of pre-deposit of duty amounting to Rs. 36,94,921/- along with interest and penalty of an equal amount. The applicant was involved in the manufacture of Modular Switches and parts classified under Chapter 85 of the Central Excise Tariff Act, 1985. They imported parts of Switches under exemption notification No. 25/09-Cus dated 28.02.1999, paying a concessional rate of duty. However, it was alleged that the applicant failed to fulfill the conditions of the exemption notification by not following the procedures outlined in the Customs Rules. The adjudicating authority denied the concessional rate of duty, demanded duty payment with interest, and imposed a penalty equal to the duty amount. An amount of Rs. 8,00,000/- already paid by the appellant was also appropriated. The Commissioner (Appeals) upheld the adjudication order.

2. The exemption notification required that imported goods be used in the registered premises of the applicant. In this case, the applicant did not comply with this condition as they sent the imported goods to another unit in Una, which was not registered for availing the concessional rate of duty under the said notification. Consequently, the applicant failed to establish a prima facie case for the waiver of the entire duty amount, interest, and penalty. The Tribunal directed the applicant to make a pre-deposit of Rs. 4,00,000/- within eight weeks and report compliance by a specified date. Upon this deposit, the pre-deposit of the remaining duty amount, interest, and penalty would be waived pending the appeal's disposal.

3. The Tribunal's decision was based on the applicant's failure to adhere to the conditions specified in the exemption notification, leading to the denial of the concessional rate of duty. The non-compliance with the requirement of using the imported goods in the registered premises resulted in the Tribunal's directive for a partial pre-deposit to proceed with the appeal process. The Tribunal emphasized the importance of fulfilling the conditions set out in exemption notifications to avail the benefits provided therein.

4. The Commissioner (Appeals) had previously upheld the adjudication order denying the concessional rate of duty to the applicant. The Tribunal's decision to require a partial pre-deposit was a result of the applicant's failure to meet the conditions stipulated in the exemption notification, as confirmed by the adjudicating authority and upheld by the Commissioner (Appeals). The Tribunal's ruling aimed to ensure compliance with the legal provisions governing the concessional rate of duty and the utilization of imported goods as per the specified requirements.

This detailed analysis outlines the issues raised in the judgment, the reasons for the Tribunal's decision, and the legal implications of non-compliance with exemption notification conditions in availing concessional rates of duty.

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