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Issues:
Waiver of pre-deposit of duty confirmed by Commissioner arising out of Customs order, Modvat credit reversal, Allegations of duty payment on imported material, Compliance with Amnesty Scheme. Analysis: The case involved an application for waiver of pre-deposit of duty amounting to Rs. 4,73,88,589/- confirmed by the Commissioner of Customs, Mumbai. The applicant held two advance licenses allowing import against export of specific products. It was noted that while the applicant did not take any Modvat credit on inputs for one product (PVC resin), they did take credit on packing material and catalyst for another product (MIBK) in violation of notification conditions. The applicant reversed some credits but not all before exporting MIBK, leading to duty allegations on acetone imports. Two show cause notices were issued, alleging non-reversal of Modvat credit and suppression of facts, resulting in duty confirmation by the Commissioner. During the hearing, the applicant's advocate argued that the notices assumed failure to produce evidence of credit reversal, while the adjudication order invoked an Amnesty Scheme requiring credit reversal and payment of interest, which was not a ground in the show cause notice. The Tribunal agreed that the adjudication order exceeded the notice's scope, finding a strong prima facie case in favor of the applicant. Consequently, the stay application was unconditionally allowed, considering the significant amount at stake, and the recovery of duty was stayed. The Tribunal scheduled an early hearing date to further address the matter. In conclusion, the Tribunal's decision highlighted the discrepancy between the allegations in the show cause notices and the basis of the adjudication order, leading to the allowance of the stay application due to a strong prima facie case in favor of the applicant. The Tribunal's cautious approach in fixing an early hearing date reflected the importance of the case's high stakes and the need for prompt resolution.
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