2009 (7) TMI 595 - AT - Customs

Appeal to Tribunal- Learned Commissioner (Appeals) by order directed the appellant to make pre-deposit of Rs.50,00,000/-(Rupees fifty lakhs) only within 30 days of receipt of that order. The appellant has submitted that it has not made any deposit as ordered by the, learned Commissioner (Appeals) except the submission that bank guarantee of Rs.31,66,464/- has already been enchased as per averment of the appellant. In the meantime, 30 day time has expired on 25-6-2009. Before this date, the appellant was before the Hon ble High Court of Delhi as aforesaid. Upon direction of Hon ble High Court on 19-6-2009 and dismissal of writ petition as withdrawn, the appellant came to Tribunal on against the order dated passed by the learned Commissioner (Appeals). Held that- Impugned order not considering the encashment of bank guarantee and other evidences produced by assessee. In view of the particular circumstances of case, matter remanded to the lower authority to hear without insisting on pre-deposit.

Issues:
1. Duty demand raised without considering merits of the case and bank guarantee encashment.
2. Confirmation of demand exceeding forgone duty.
3. Compliance with export obligation under EPCG scheme.
4. Appeal process and pre-deposit requirement.
5. Appellant's financial condition and hardship.
6. Authority's consideration of encashed bank guarantee.
7. Remand of the matter for reconsideration.

Analysis:

1. Duty Demand and Bank Guarantee:
The appellant contested the duty demand of Rs.78,50,751, arguing that the authority failed to consider their entitlement under the EPCG license after fulfilling the export obligation. The appellant highlighted the encashment of a bank guarantee of Rs.31,66,464 by the revenue. The appellant claimed denial of justice due to the failure to consider this crucial aspect, leading to an arbitrary order for a pre-deposit of Rs.50 lakhs within a specified timeframe.

2. Confirmation of Demand:
The appellant raised concerns about the confirmation of a demand exceeding the forgone duty amount, which was not addressed by the Commissioner (Appeals). The appellant's financial distress due to recession and accumulated losses further emphasized the need for a reevaluation of the duty amount imposed.

3. Compliance with Export Obligation:
Under the EPCG scheme, the appellant imported capital goods and fulfilled the export obligation to the extent of 43.30%. The appellant argued that the shift in production from marble to slate affected their ability to meet the export obligation but maintained that there was no willful default. The appellant sought deletion of the past export performance requirement based on policy provisions and pending requests with the DGFT.

4. Appeal Process and Pre-Deposit:
The appellant's appeal journey involved a writ petition in the High Court, directing them to challenge the order before the CESTAT. The appellant's plea to reconsider the matter without insisting on pre-deposit was based on the argument that failure to deposit the specified amount would cause undue hardship.

5. Financial Condition and Hardship:
The appellant's financial difficulties, including significant losses and reduced sales, were highlighted to support the request for relief from the pre-deposit requirement. The appellant's counsel emphasized the need for the Tribunal to intervene to prevent undue hardship to the appellant.

6. Consideration of Encashed Bank Guarantee:
The Tribunal noted that the Commissioner (Appeals) did not consider the encashment of the bank guarantee or certain evidence presented by the appellant, leading to a decision to remand the matter for reconsideration.

7. Remand of the Matter:
Considering the appellant's circumstances and the need to prevent injustice, the Tribunal remanded the matter to the Commissioner (Appeals) for a fresh order, emphasizing the statutory power to ensure justice and citing relevant precedents.

This detailed analysis of the judgment addresses the various issues raised by the appellant and the considerations made by the Tribunal in remanding the matter for further review.

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