2000 (1) TMI 375 - AT - Customs

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty.
2. Interpretation of Notification No. 159/86 dated 1-3-1986 as amended by Notification No. 99/87 dated 1-3-1987.
3. Allegations of non-compliance with notification conditions.
4. Applicability of Sections 111(d), 111(o), 28(1), and 112 of the Customs Act, 1962.
5. Export obligation fulfillment under the notification.
6. Legal precedents and judgments cited in support of arguments.

Issue 1: Waiver of pre-deposit of duty and penalty
The application sought waiver of pre-deposit of duty and penalty amounting to Rs. 20,07,049.80 and Rs. 6,00,000, respectively, imposed on the appellants, M/s. Anmol Jewellers. After arguments from both parties, the Tribunal granted the waiver during the appeal proceedings, staying the recovery of duty and penalty.

Issue 2: Interpretation of Notification No. 159/86 and 99/87
The case involved the import of machines under concessional duty rates as per Notification No. 159/86 amended by Notification No. 99/87. The amendment required the machines to be used in processing and manufacturing Gem and Jewellery for export purposes. The dispute arose when a show cause notice alleged non-compliance with these conditions.

Issue 3: Allegations of non-compliance
The show cause notice accused the importers of not using the machines for the intended purpose, leading to demands for duty payment under Section 28(1) of the Customs Act, 1962, and penalties under Section 112. The Commissioner of Customs passed an order confirming duty and penalties, confiscating the machines, and allowing redemption upon payment of a fine.

Issue 4: Applicability of Customs Act sections
The case involved allegations of liability under Sections 111(d) and 111(o) of the Customs Act, in addition to Sections 28(1) and 112 for duty payment and penalties, respectively.

Issue 5: Export obligation fulfillment
Arguments centered around whether the obligation to export goods under the notification required the importer to be the exporter or if third-party exports sufficed. The appellant claimed that goods were exported by Merchant Manufacturers, fulfilling the notification's condition.

Issue 6: Legal precedents and judgments
The appellant relied on legal precedents, including the case of Nathan Jewellers & Ors., emphasizing the necessity to follow co-ordinate Bench opinions and the permissibility of third-party exports to meet notification conditions. The Tribunal found the cited judgments to be of guiding value and granted the waiver of pre-deposit based on these considerations.

This comprehensive analysis covers the issues of waiver of pre-deposit, interpretation of notification conditions, allegations of non-compliance, the application of relevant sections of the Customs Act, the fulfillment of export obligations, and the significance of legal precedents in the judgment delivered by the Appellate Tribunal CEGAT, Mumbai.