1990 (11) TMI 276 - AT - Customs

Summary

Issues:
- Violation of principles of natural justice by denying cross-examination of witnesses.
- Justification of pre-deposit waiver under Section 129E of the Customs Act, 1962.
- Merits of the case regarding the composition of caps manufactured from synthetic & woollen rags.
- Financial soundness of the applicant as a 100% Export Oriented Unit.

Analysis:

Issue 1: Violation of principles of natural justice by denying cross-examination of witnesses
The appeal sought waiver of pre-deposit of duty and penalty imposed for exporting caps made from synthetic & woollen rags instead of 100% acrylic fibre as required by the export policy. The appellant argued that the right to cross-examine witnesses was denied, violating natural justice principles. The Tribunal noted the denial of cross-examination and emphasized that such denial amounts to a fundamental violation of natural justice. The Tribunal distinguished previous judgments cited by the adjudicating authority, stating they were not applicable to the current case. Ultimately, the Tribunal found merit in the argument of violation of natural justice and granted the waiver of pre-deposit.

Issue 2: Justification of pre-deposit waiver under Section 129E of the Customs Act, 1962
The appellant contended that the denial of the opportunity to cross-examine witnesses was a violation of natural justice. The Tribunal agreed, citing previous decisions that supported the importance of cross-examination in maintaining fairness. The Tribunal highlighted that the denial of cross-examination was unjustified and granted the waiver of pre-deposit, emphasizing the fundamental principle of natural justice.

Issue 3: Merits of the case regarding the composition of caps manufactured from synthetic & woollen rags
The appellant argued that the caps were initially certified as 100% acrylic by relevant authorities but later deemed otherwise based on visual examination. The respondent relied on the opinions of experts stating the caps were not made from 100% acrylic fibre. The Tribunal acknowledged the differing opinions but deferred a detailed examination of the merits to the appeal hearing, focusing on the violation of natural justice in the current decision.

Issue 4: Financial soundness of the applicant as a 100% Export Oriented Unit
The respondent argued that as a 100% Export Oriented Unit, the applicant should be financially sound. The appellant presented financial details showing limited profit and capital. The Tribunal considered the financial aspect but primarily focused on the violation of natural justice in the denial of cross-examination. Ultimately, the Tribunal granted the waiver of pre-deposit and stayed the recovery of duty and penalty pending the appeal's disposal.

This detailed analysis of the judgment addresses the key issues raised in the appeal, focusing on the violation of natural justice, the justification for pre-deposit waiver, the merits of the case, and the financial soundness of the applicant as a 100% Export Oriented Unit.