2009 (3) TMI 164 - AT - Customs

Non-fulfillment of export obligation admitted fact notification no. 13/81 payment of duty at depreciated value - held that - In view of this admitted position of non-fulfilment of export obligation, with admitted impossibility of fulfilling the same in future, and non-renewal of green card after march 2005 there has been a clear cut violation of conditions of notification 13/81 as amended by notification 53/97 for imported goods and notification 1/95 in respect of indigenous goods apparently depreciation not allowable stay granted partly

Issues:
1. Modification of stay order for deposit of duty
2. Premature demand of duty before debonding
3. Admissibility of depreciation on capital goods
4. Distinguishing features of the present case
5. Compliance with export obligation for duty demand
6. Bifurcation of customs and excise duty for pre-deposit
7. Relevance of tribunal decisions and apex court decisions
8. Dismissal of miscellaneous application by revenue

1. Modification of Stay Order for Deposit of Duty:
The judgment involves a miscellaneous application for modifying a stay order requiring the appellants to deposit Rs. 1.25 crores towards customs and excise duty within eight weeks. Another application by the revenue sought dismissal of the appeal due to non-compliance with the stay order.

2. Premature Demand of Duty Before Debonding:
The applicant argued that duty demand was premature as the imported capital goods were still in customs bond, and duty is demandable only upon debonding. They referred to various decisions supporting their stance, emphasizing that the demand was premature.

3. Admissibility of Depreciation on Capital Goods:
The applicant contended that depreciation on capital goods should be considered before passing the pre-deposit order. They cited relevant court decisions and argued that depreciation should be allowed, especially in cases of non-fulfillment of export obligations.

4. Distinguishing Features of the Present Case:
The tribunal noted that the unit in question had been closed since October 2001, with machinery rusted and obsolete, making the plant unusable. This non-fulfillment of export obligation led to a violation of notification conditions, differentiating it from other cases cited by the applicant.

5. Compliance with Export Obligation for Duty Demand:
The tribunal found a clear breach of export obligations since October 2001, leading to duty payment requirements. The duty was deemed payable from the closure of the unit, and depreciation was not considered applicable beyond the show cause notice date.

6. Bifurcation of Customs and Excise Duty for Pre-Deposit:
The applicant raised concerns about the lack of bifurcation in the pre-deposit order. The tribunal clarified the amounts due for customs and excise duty, requiring compliance within a specified timeline.

7. Relevance of Tribunal Decisions and Apex Court Decisions:
The tribunal analyzed various decisions cited by the applicant and concluded that the duty demand was not dependent on debonding but on non-fulfillment of export obligations. They considered the applicability of depreciation and upheld the pre-deposit order with specified amounts for customs and excise duty.

8. Dismissal of Miscellaneous Application by Revenue:
The tribunal dismissed the miscellaneous application by the revenue, deeming it infructuous due to the extension of the compliance period for the appellant. Compliance/non-compliance reporting requirements were emphasized, leading to the dismissal of the revenue's application.

In conclusion, the judgment addressed multiple issues related to the modification of stay orders, premature duty demands, admissibility of depreciation, distinguishing features of the case, compliance with export obligations, bifurcation of duties, relevance of legal precedents, and dismissal of miscellaneous applications by the revenue.

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