1999 (1) TMI 141 - AT - Customs

Summary

Issues:
1. Stay of payment of duty and penalty.
2. Allegations of fraudulent misuse of DEEC scheme.
3. Failure of natural justice in providing documents.
4. Financial inability of the appellants.
5. Prima facie guilt of violations.

Issue 1: Stay of payment of duty and penalty
The appellants filed applications seeking a stay of payment of duty amounting to Rs. 59,02,903, which was part of the total duty demanded under an adjudication order. A penalty of Rs. 1 crore was imposed on the Proprietor, and an application was made for waiver of this amount. The Tribunal directed the appellants to pay an additional sum of Rs. 5 lakhs within two months, with the waiver of the remaining duty and penalty upon such payment.

Issue 2: Allegations of fraudulent misuse of DEEC scheme
The appellants, holders of Advance Licence, were accused of importing goods and exporting them to fulfil obligations under the DEEC scheme. It was alleged that export documents were forged by the Proprietor of a shipping agency, involving manipulation of invoices, preparation of forged shipping bills, and misuse of test reports and stamps. Statements of involved parties were recorded, and a Show Cause Notice was issued, leading to the impugned order after due hearings.

Issue 3: Failure of natural justice in providing documents
The appellants argued a failure of natural justice as they were not provided with documents referred to in the Show Cause Notice despite multiple requests. The department claimed that opportunities were given to access the documents, but the appellants failed to collect them as per the correspondence exchanged between the parties. The Tribunal emphasized the importance of examining the letters exchanged to determine any failure of natural justice, eventually directing the appellants to pay an additional sum towards the duty.

Issue 4: Financial inability of the appellants
The Consultant representing the appellants did not raise any arguments regarding financial difficulties faced by the appellants. As a result, the Tribunal directed the appellants to pay a specified sum within a stipulated time frame, considering the lack of arguments presented on financial grounds.

Issue 5: Prima facie guilt of violations
The statements provided by the appellants and an employee indicated prima facie guilt of violations related to the charges leveled against them. The Tribunal ordered the appellants to pay a portion of the demanded penalty, with the waiver of the remaining sum upon timely payment.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CEGAT, Mumbai, providing detailed insights into the legal proceedings and decisions made in the case.