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Issues:
1. Denial of benefit of Notification No. 50/95-Cus. to imported components. 2. Imposition of penalty under Section 114A of the Customs Act. 3. Financial hardship in making deposits as per adjudication order. Analysis: Issue 1: Denial of benefit of Notification No. 50/95-Cus. to imported components The appellant sought waiver of pre-deposit and stay of recovery of duty amounting to Rs. 58,65,851 under Rule 114A of the Customs Act. The advocate argued that the adjudicating authority wrongly denied the benefit of Notification No. 50/95-Cus. to the imported components, citing the case of Maruti Udyog Ltd. The appellant contended that the denial was based on an incorrect application of Rule 2(a) to the notification, which, according to the appellant, was illegal. The Tribunal acknowledged the appellant's strong prima facie case, especially regarding differential duty payment. The Tribunal directed a detailed examination of the parts covered by the notification and the duty paid on them. If the duty was paid in full on parts not covered by the notification, a complete waiver was granted; otherwise, a waiver was to be granted to the extent of the differential duty on parts covered by the notification. Issue 2: Imposition of penalty under Section 114A of the Customs Act The appellant also contested the imposition of a penalty of Rs. 58,65,851 under Section 114A, arguing that the imports were made before the provision's introduction in September 1996, making retrospective application of penal provisions impermissible. The Tribunal agreed with the appellant, granting a complete waiver and stay on the recovery of the penalty for both applicants based on the circumstances presented. Issue 3: Financial hardship in making deposits Regarding the financial condition of the appellant, the appellant submitted an audited balance sheet indicating the closure of their activities and potential financial hardship in paying the dues. However, the Joint CDR representing the respondents argued that the appellant had sufficient net current assets to meet the duty payment without facing financial hardship. The Tribunal considered the financial aspects and ruled that if no differential duty was required to be paid based on their directions, no duty should be deposited at that stage. Consequently, a complete waiver and stay on the recovery of the penalty were granted to both applicants, taking into account the financial circumstances and the merits of the case. This judgment by the Appellate Tribunal CEGAT, New Delhi, addressed the issues of denial of notification benefits, penalty imposition, and financial hardship, providing detailed analysis and directions for the parties involved.
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