2007 (9) TMI 224 - AT - Customs

Stay application - prayer of the 100% EOU (E-3 Plant) for de-bonding with effect from the date of application i.e., 6-10-2001 is pending before the Supreme Court - impugned case is linked and inter connected to the case, which is pending before the Hon ble Supreme Court and since the stay has been granted by the Hon ble Supreme Court in that case, and the matter is sub-judice before the Hon ble Supreme Court, stay is granted in instant case

Summary

Issues Involved:
Application for stay against Order-in-Original confirming demand of customs duty, penalty, and confiscation of goods under Customs Act, 1962. Interpretation of conditions for availing concessional rate of duty for imported inputs. Connection between the case pending before the Hon'ble Supreme Court and the present case. Prima facie assessment of the interdependence of the cases and the impact of the Supreme Court's decision on the present case.

Analysis:
The case involves an application for stay against an Order-in-Original confirming the demand of customs duty, penalty, and confiscation of goods under the Customs Act, 1962. The applicant, engaged in the manufacture of Optical Fibre, imported inputs at a concessional rate of duty for manufacturing purposes. The conditions required the use of imported inputs in the manufacture of optical fibre within their factory. However, a case was booked against the 100% EOU set up by the applicant for manufacturing the same goods without proper permission, leading to fabrication of records to show production in the applicant's factory.

The Order-in-Original passed against the 100% EOU was subsumed in a Tribunal's order, which was later challenged in the Hon'ble High Court of Bombay. The High Court dismissed the appeal, leading to a subsequent appeal to the Hon'ble Supreme Court. The Supreme Court, after condoning the delay, continued the interim stay granted by the High Court. The present stay application is examined in light of the Supreme Court's order and the issue of non-utilization of imported inputs in the factory of production, leading to the demand for differential customs duty.

The applicant argued that the present case is linked to the case pending before the Supreme Court, where the de-bonding of the 100% EOU is sought. They contended that the outcome of the Supreme Court's decision in that case would impact the present case significantly. Considering the interdependence of the cases and the stay granted by the Supreme Court, the Tribunal ordered the waiver of pre-deposit and a stay on the recovery of duty and penalties pending the appeal. The Tribunal found it appropriate to await the decision of the Supreme Court before proceeding with the recovery process, acknowledging the material bearing of the Supreme Court's decision on the present case.

In conclusion, the Tribunal recognized the connection between the cases and the potential impact of the Supreme Court's decision on the present matter. Consequently, the Tribunal granted a waiver of pre-deposit and stayed the recovery of duty and penalties, pending the outcome of the appeal, in alignment with the interim stay granted by the Hon'ble Supreme Court.