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Issues:
1. Challenge to the order passed by the Commissioner of Customs, New Delhi. 2. Allegations of clandestine import of goods and evasion of duty against M/s. Rahul Watches Pvt. Ltd. 3. Confiscation of goods and imposition of penalties on the company, directors, and Power of Attorney Holder. 4. Request for waiver of pre-deposit of penalty amounts under Section 129E of the Customs Act, 1962. Analysis: The case involved the challenge to an order passed by the Commissioner of Customs, New Delhi, regarding allegations of clandestine import of goods and duty evasion by M/s. Rahul Watches Pvt. Ltd. The Customs Department seized watches and watch movements from the company's premises, suspecting illegal importation. The company, directors, and Power of Attorney Holder were issued a show cause notice, which they contested by claiming that the watches were assembled on-site and the watch movements were part of a legitimate import. However, the Commissioner upheld the confiscation of goods and imposed penalties totaling Rs. 5 lacs on the company and Rs. 1 lac each on the directors and Power of Attorney Holder. The appellants sought a waiver of the pre-deposit requirement for the penalty amounts under Section 129E of the Customs Act, 1962. The company argued that the assembly of watches and import of watch movements were supported by documents, and the Commissioner erred in assessing the value of the watches. The appellants also contended that the show cause notice did not establish any wrongdoing by the directors and Power of Attorney Holder, thus challenging the imposition of penalties on them. In response, the Department argued that all watches bore the brand name "Swiss Tressa," indicating foreign origin, and highlighted inconsistencies in the company's explanations regarding the source of the watches and movements. The Department pointed out conflicting statements made by the company's director and the lack of supporting documentation for the claimed purchase of watches from another entity. After considering the arguments presented, the Tribunal found that the company failed to establish a prima facie case for waiving the entire penalty amount. However, due to uncertainties regarding the value of the goods and the lack of specific allegations against the individuals in the show cause notice, the Tribunal directed M/s. Rahul Watches Pvt. Ltd. to deposit Rs. 1,00,000 within two months, while dispensing with the requirement for the directors and Power of Attorney Holder to make any pre-deposit. The Tribunal set a compliance deadline and scheduled a follow-up report for early February 1998 to monitor the deposit and further proceedings in the case.
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