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2001 (3) TMI 147
Value of clearances - Clubbing of - Dummy ... ... ... ... ..... the demand upon the so called dummies the adjudicating authority has implicitly recognised their existence would also have to be kept in mind. 11. The demand for duty will fall on limitation. As we have noted that the notice cited two factors - the failure to declare that the investment limit has been exceeded and the failure to indicate the true nature of the relationship between the parties. In his order the Collector has upheld the application of extended period only on the ground of failure to declare the investment in plant and machinery had exceeded Rs. 35 lakhs. There was no requirement for the appellant to declare the extent of investment limit to the department. The notification, as we have noted, did not have any condition with regard to these. Omission to decline a fact which the law does not require to be declared cannot attract the extended period contained in sub-section (1) of Section 11A. 12. The appeal is accordingly allowed and the impugned order set aside.
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2001 (3) TMI 145
Betel nut powder ... ... ... ... ..... as Pan Masala. In fact, it became dutiable only subsequent to the period involved in the present dispute i.e. after 16-3-1995. The issue remains covered in favour of the appellants. Since the product was not liable to classification under the tariff during the relevant period, duty demand on the same did not arise. Accordingly, the duty demand is required to be set aside as untenable. We do so. As there was no duty liability, the question of penalty also does not arise and the penalty is also required to be set aside and we order accordingly. 5. In view of what has been stated above, the appeal is allowed and the impugned order is set aside in its entirety with consequential relief. We are informed that the appellants had deposited Rs. 4 lakhs pursuant to the order on the stay petition passed by the Tribunal earlier. In view of our present order that no duty or penalty is due from the appellants, the Revenue shall return the said deposit without any delay to the appellants.
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2001 (3) TMI 143
Baggage - Redemption fine ... ... ... ... ..... onclude that confiscation of the goods which were otherwise freely importable is not called for and set aside the confiscation of such goods valued at Rs 4.24 lakhs. We confirm the confiscation of the spectacle frames as not having challenged. We also confirm the confiscation of other goods valued at Rs 2.76 lakhs under clause (d) of Section 111 of the Act. 7. We however permit their redemption on payment of fine. Having regard to the fact that the appellant did attempt to import these goods without a licence, and their value and quantity, and since the possibility that it cannot be excluded in the facts of this case, we direct the Commissioner to fix the redemption fine, not, as he may normally do, on the basis of margin of profit but by applying the provisions of sub-section (2) of Section 125 of the Act i.e. on the sale price less duty payable thereon. On the same consideration, we are unable to interfere with the penalty imposed and confirm it. 8. Appeal allowed in part.
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2001 (3) TMI 141
Watch straps ... ... ... ... ..... Notification No. 72/86-C.E. (as amended) at Sl. No. 4 exempts all watch components falling under Chapter 91 in excess of 5 of duty. Since watch straps are specifically mentioned under 91.13 of the CET Act, 1985 and are held to be falling in this case under Chapter 91, we cannot find any reason to continue to deny benefit of Notification No. 72/86-C.E. (as amended) on the Leather Watch Straps being manufactured by the appellants, especially on the ground as arrived at by Commissioner (Appeals) that watch straps did not form part of the manufacturing process or enters into such process and a watch can be sold even without the strap. Commissioner s further finding If at all it is marketable only with strap there is no evidence placed before me in support of such claim. The appellant only points out that the watch strap attached to it also is no reasons to deny the benefit. 3. In view of our findings, order is set aside and appeal allowed with consequential benefits as per law.
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2001 (3) TMI 138
Drawback - Valuation - Evidence ... ... ... ... ..... goods. The Commissioner s basis for arriving at the value of the goods, apart from the DEPB scheme is evidently his own subjective view. He has determined the value to be between Rs. 250/- to Rs. 300/- seeing the quality of the goods . The contention of the counsel for the appellant that the Commissioner could not substitute his own subjective opinion to determine the value of the shirts has to be accepted. Even going by the reasoning that he has adopted, leading to the conclusion that the shirts have not been shown to be undervalued, his decision to limit their value is arbitrary and irrational. The departmental representative s contention that the appellant has already been given sufficient benefit by the Commissioner is no answer. Since the department, in the Commissioner s own words, has not established undervaluation, the value declared by the appellant is required to be accepted and the drawback calculated upon it paid to it. 6.Appeal allowed. Impugned order set aside.
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2001 (3) TMI 136
Vegetable oils - Valuation (Central Excise) ... ... ... ... ..... ugned order, without any data. During that period Acid oil was produced and sold. Hence the Commissioner erred in holding that soap stock, a marketable commodity was produced during the relevant period. 6. In view of the findings, the question of limitation raised by the learned Counsel representing the appellant need not be gone into. 7. Before parting with the case we would like to add that the quantity of soap stock has been found out from the quantity of Acid Oil manufactured by the appellant. Roughly it works out to be 5 1 i.e. 5 units of soap stock is required to manufacture with 1 unit of Acid Oil. Acid Oil is not obtained from soap stock. Acid Oil is obtained from soap water. While working backwards the quantity arrived at by the Commissioner in the impugned order was not of soap stock but of soapy water. That quantity of soapy water is not marketable commodity. In the circumstances detailed above, we allow the appeal and set aside the order impugned in its entirety.
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2001 (3) TMI 134
Appeal - Restoration of ... ... ... ... ..... cing proof of payment. In these circumstances, he therefore prays that dismissal order may be set aside and the appeal may be restored and in this connection, he relied on the decision of the Hon ble Gujarat High Court in the case of S.T. Texturisers and Another v. Union of India reported in 2000 (39) RLT 1. 2. Shri S.K. Das, ld. JDR fairly leaves the matter for decision by the Bench. 3. We have carefully perused the Hon ble High Court s decision cited by the Counsel wherein the Court has held that once pre-deposit has been made even though belatedly and after the appeal has been dismissed, the Tribunal ought to have restored the appeal and order of the Tribunal dismissing the ROA application was set aside by the High Court. Following the ratio of the Hon ble Gujarat High Court decision cited (supra), we set aside the dismissal order in the present case and restore the appeal and fix it for regular hearing on 3-4-2001. 4. ROA application is hereby allowed. Dictated in Court.
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2001 (3) TMI 132
Wire and cables ... ... ... ... ..... 5) E.L.T. 96 is not applicable to the present matter as the goods involved in the said case were cable terminals. We, therefore, hold that the view taken by the Tribunal in Shakun Products v. CCE, Kanpur in classifying the product wires/cables cut to length and fitted with connectors under Heading 85.44 of the CETA is correct view and the impugnd goods are classifiable under the said heading only. The view taken in the case of CCE, Mumbai v. Raj Kumar Engineers, Final Order No. C-II/1339/99-WZB, dated 20-5-1999 1999 (111) E.L.T. 737 (Tribunal) is not correct inasmuch as both Headings 85.22 and 85.29 were excluded from Note 2(a) to Section XVI and the classification could not have been determined under these headings by applying Note 2(a) to Section XVI. 8. We accordingly hold that the impugned goods are classifiable under Heading 85.44 of the Schedule to the Central Excise Tariff Act. As only the issue of classification is involved, the appeal filed by the Revenue is allowed.
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2001 (3) TMI 131
Issues Involved: 1. Classification of Uninterrupted Power Supply System (UPSS) under the Central Excise Tariff Act. 2. Applicability of Harmonized System of Nomenclature (HSN) for classification. 3. Validity of previous Tribunal decisions and Board circulars on UPSS classification.
Summary:
1. Classification of UPSS: The appellants, engaged in manufacturing UPSS, classified their product under Chapter Heading 85.04 of the Central Excise Tariff Act, 1985, attracting a 10% ad valorem duty. The Department issued show cause notices demanding differential duty by reclassifying UPSS under sub-heading 8543. The adjudicating authority and the Appellate Commissioner upheld this reclassification, relying on previous Tribunal decisions.
2. Applicability of HSN: The Tribunal emphasized that the Central Excise Tariff is based on the HSN. According to the Apex Court, any dispute regarding tariff classification must be resolved with reference to HSN unless the Central Excise Tariff Act indicates otherwise. The HSN describes static converters as devices converting electrical energy for further use, including rectifiers and inverters, which aligns with the function of UPSS.
3. Validity of Previous Tribunal Decisions and Board Circulars: The Tribunal reviewed previous decisions, including J.K. Synthetics v. Collector of Customs and Tata Libert Ltd. v. CCE, which classified UPSS under 8543. However, the Tribunal found these decisions erroneous, noting that they did not consider the actual functioning of UPSS and the Board's Circular No. 40/90, which classified UPSS under 8504. The Tribunal concluded that the presence of a battery in UPSS does not alter its classification as a static converter.
Conclusion: The Tribunal held that UPSS should be classified under sub-heading 8504, as it functions primarily as a static converter. The orders impugned in the appeal were set aside, and the amount deposited by the appellant was ordered to be returned without delay. The appeal was allowed in these terms.
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2001 (3) TMI 130
Reference to Larger Bench ... ... ... ... ..... question of law referred to by the West Regional Bench, with due respect to the Members, are not to be answered. We decline to answer those questions because of the peculiar facts and circumstances of the case when it is established that the claimants of the benefits under the Notification failed in proving the circumstances warranting its application, this Tribunal is not to go into the hypothetical question of the scope and binding nature of the Notification. The question referred need be answered only in circumstances where assessee establishes the requirements warranting the application of the Notifications. In the instant case, the assessee did not bring out any circumstance to establish that he is entitled the benefits of the Notifications. 2. In view of what has been stated above we do not find any ground to extend the benefit of the Notifications, as claimed by the appellants. Consequently, we confirm the orders passed by the authorities below. Appeals are dismissed.
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2001 (3) TMI 129
Issues involved: Interpretation of the Supreme Court judgment in Samrat International Pvt. Ltd. v. Collector of Central Excise regarding provisional assessment of duty and the applicability of Rule 9B of the Central Excise Rules, 1944.
Summary:
1. Larger Bench Decision: A Larger Bench of five Members held that the Supreme Court's decision in Samrat International applies to cases of demand as well as refund, emphasizing the need for compliance with Rule 9B for provisional assessments.
2. Doubt Raised by Two-Member Bench: A subsequent Bench doubted the necessity of following Rule 9B for provisional assessments, leading to a reference to a still Larger Bench for reconsideration.
3. Six-Member Bench Decision: The issue before the six-Member Bench was whether the Supreme Court's decision in Samrat International allows for provisional assessment of duty without strict adherence to Rule 9B.
4. Analysis of Rule 9B: Rule 9B of the Central Excise Rules provides for the procedure of making provisional assessments, with duty payment being considered provisional if this rule is followed.
5. Supreme Court's Interpretation: In the Samrat International case, the Supreme Court deemed duty payment as provisional even without strict compliance with Rule 9B, emphasizing the provisional nature of payments made during the interim period of classification list approval.
6. Coastal Gases Case: In the Coastal Gases case, the Court reiterated the provisional nature of duty payment during the interim period, subject to the final approval of the concerned officer.
7. Conclusion of the Six-Member Bench: The six-Member Bench concluded that Samrat International allows for provisional duty payments pending classification list approval, without the strict requirement of following Rule 9B. The observation by the Larger Bench regarding the necessity of Rule 9B compliance for provisional assessments was deemed unnecessary in such cases.
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2001 (3) TMI 128
Issues Involved: 1. Valuation of captively consumed goods u/r 6(b) of Central Excise Valuation Rules. 2. Inclusion of profit in the valuation of captively consumed goods. 3. Determination of assessable value based on gross profit vs. net profit. 4. Reassessment of duty and penalties imposed.
Summary:
1. Valuation of Captively Consumed Goods: The primary issue concerns the valuation of goods manufactured by an assessee and consumed by him in further manufacture, specifically u/r 6(b) of the Central Excise Valuation Rules. Rule 6(b) provides two methods for valuation: the value of comparable goods [6(b)(i)] or the cost of production including profits [6(b)(ii)]. The case focuses on the second method.
2. Inclusion of Profit in Valuation: The appellant, M/s. Raymonds Limited, included only the overall profit from all items in the cost of production statement. However, for valuation purposes, only the profit from the woven fabric should be included. Both parties agreed that the profit for valuation should be specific to the goods under assessment and determined according to generally accepted costing principles.
3. Determination of Assessable Value: The Tribunal clarified that the profit to be included is the gross profit, not the net profit. The assessable value should be the normal sale price or its nearest equivalent, and the profit relevant for valuation is the profit from the manufacture and sale of the goods under assessment. The Tribunal emphasized that the profit for captively consumed goods is a projected profit, as actual profit is not earned due to the absence of sale.
4. Reassessment of Duty and Penalties: The Tribunal found that the proceedings were based on a misunderstanding that the profit of 3.34% included non-textile activities. The appellant's cost of production included only the textile division's profit, in line with the Central Board of Excise & Customs' instructions. The demand for reassessment and increased profit addition was not justified. Consequently, the duty demand and penalties were set aside.
Conclusion: (i) The profit for captively consumed goods u/r 6(b)(ii) is the profit normally earned on the sale of such goods. (ii) Profits from other activities are irrelevant for valuation. (iii) The profit is a projected profit based on generally accepted costing principles. (iv) The profit included should be gross profit, not net profit.
The appeals were allowed, and the impugned order was set aside with consequential relief.
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2001 (3) TMI 127
Issues Involved: 1. Whether the suspension of the appellant's Customs House Agent (CHA) license under Regulation 21(2) of the CHA Regulations was in breach of the principles of natural justice. 2. Whether the Commissioner was required to follow the procedure under Regulation 23 for suspension under Regulation 21(2). 3. Whether the Commissioner's order was issued in colorable exercise of power.
Summary:
1. Breach of Principles of Natural Justice: The appellant-Company contended that the suspension of their CHA license was made in breach of the principles of natural justice, as no show-cause notice was served, nor was any personal hearing given before the order was issued. The Tribunal noted that the principles of natural justice require at least a minimal opportunity to be heard, either pre-decisional or post-decisional, as laid down by the Hon'ble Supreme Court in cases like *Mohinder Singh Gill v. Chief Election Commissioner* and *Maneka Gandhi v. Union of India*. The Commissioner failed to provide even a post-decisional hearing, thus failing the test of natural justice.
2. Applicability of Regulation 23 Procedure: The Tribunal examined the provisions of Regulations 21 and 23 of the CHA Regulations. It concluded that the procedure laid down under Regulation 23, which includes issuing a show-cause notice and providing a personal hearing, is not applicable to the immediate suspension of a license under Regulation 21(2). The action under Regulation 21(2) is of an interim nature and is warranted by the exigencies of the situation. The non-obstante clause in Regulation 21(2) indicates that the Commissioner's function under this sub-regulation is not subject to the provisions of Regulation 23.
3. Colorable Exercise of Power: The Tribunal found that the impugned order did not show the existence of any pre-requisites for suspension under Regulation 21(2), such as a pending or contemplated enquiry or a finding of genuine necessity for immediate action. The order was thus deemed to be issued in colorable exercise of jurisdiction. The Tribunal directed the Commissioner to give a personal hearing to the appellants and pass a speaking order within four weeks on whether the suspension should continue. If the Commissioner fails to pass such an order within the stipulated period, the impugned order will stand set aside.
Conclusion: The Tribunal held that the suspension order did not comply with the principles of natural justice and was issued in colorable exercise of power. The Commissioner was directed to provide a personal hearing and pass a speaking order within four weeks, failing which the suspension order would be set aside. The Tribunal clarified that this order does not prevent the Commissioner from proceeding against the appellants under Regulation 21(1).
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2001 (3) TMI 126
Issues involved: The issues involved in this judgment relate to the imposition and refund of anti-dumping duty on PVC Resin imported from South Korea, specifically concerning the timing and procedure for claiming refunds, jurisdiction of the tribunal, and entitlement to interest on delayed refunds.
Imposition and Refund of Anti-Dumping Duty: The case involved the import of PVC Resin from South Korea, subject to anti-dumping duty. Initially, duty was levied at Rs. 1700 PMT, which was later reduced to Rs. 1253 PMT. The importer sought a refund of the excess amount paid, which was rejected on the grounds of being time-barred. The tribunal held that the duty was provisional, and the claim for refund was not barred by limitation under Section 27 of the Customs Act.
Jurisdiction of the Tribunal: The appeals filed by the Revenue were initially directed to a special forum specified in Section 9C(5) of the Customs Tariff Act, leading to a transfer of the appeals to the Delhi Bench for adjudication by a bench constituted under the relevant section.
Entitlement to Interest on Delayed Refunds: The tribunal ruled that the Central Government was obligated to refund the excess anti-dumping duty collected promptly after the final determination of duty. As the refund was delayed for over seven years, the importer was entitled to interest at a rate of 12% per annum from the date of expiry of three months from the final notification until the date of payment.
This judgment clarifies the legal provisions governing the imposition and refund of anti-dumping duty, highlights the jurisdictional aspects of tribunal proceedings, and establishes the entitlement of importers to interest on delayed refunds in accordance with statutory provisions.
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2001 (3) TMI 125
Revision - Jurisdiction - Drawback - Words and phrases - Corrigendum and amendment ... ... ... ... ..... porter would determine his costing, including his profit, on the basis of the information so provided in this schedule. Any subsequent change in the rate would amount to be an amendment and an amendment, unless specifically made retrospectively applicable, would operate only prospectively. In such a situation, for this corrigendum which is of the nature of an amendment the effective date would be the date when it is made known to the public by its publication in the Gazette or through a Public Notice. Therefore, Govt. would observe that the applicable rate of DBK, in this case, would be the one specified by the aforesaid Notification dated 30-5-1997 and not the one stated in the corrigendum dated 22-6-1997. This being the position, the issue of SCN for recovery of the so-called excess payment become redundant. Accordingly the point raised about limitation regarding issue of demand notice has not been examined. 10.The Revision Application is accordingly allowed. 11.So ordered.
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2001 (3) TMI 124
Issues involved: Central Excise duty confirmation, failure to furnish proof of exports, recovery of interest, penalty imposition, pre-deposit requirement, endorsement discrepancies, reliance on case laws, imposition of penalty without mens rea.
Central Excise Duty Confirmation and Penalty Imposition: The Revision Application was filed against the Order-in-Appeal confirming Central Excise duty and imposing penalty for failure to furnish proof of exports. The Deputy Commissioner confirmed the duty and imposed penalty under Rule 173Q of the CER, 1944. The Commissioner (A) dismissed the appeal due to non-pre-deposit of duty demanded and penalty imposed under Sec. 35F of the CEA, 1944. The applicants argued for waiver of pre-deposit based on endorsement discrepancies and requested consideration on merits, citing various case laws. The Govt. observed overwhelming documentary evidence supporting the export, including endorsements by Central Excise and Customs officers, and decided to condone non-submission of original AR 4, subject to verification by the jurisdictional Asstt. Commissioner.
Imposition of Penalty and Proof of Export: The applicants contended that penalty imposition without mens rea is unjustified, citing the Supreme Court decision in Hindustan Steel Ltd. v. The State of Orissa. The Govt. upheld the penalty imposition as the original AR 4 with Customs endorsement was not produced. The Govt. modified the Order-in-Appeal to allow condonation of non-submission of proof of exports based on extensive documentary evidence, subject to verification by the Asstt. Commissioner. The penalty imposition was upheld due to the lack of original AR 4 with Customs endorsement, despite the documentary evidence supporting the export.
Conclusion: The Govt. modified the Order-in-Appeal to allow condonation of non-submission of proof of exports based on substantial documentary evidence. The penalty imposition was upheld due to the absence of the original AR 4 with Customs endorsement. The applicants' plea for waiver of pre-deposit was considered in light of the endorsement discrepancies and extensive documentary evidence supporting the export.
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2001 (3) TMI 123
Stay/dispensation of pre-deposit ... ... ... ... ..... n 35F of the Central Excise Act, 1944. However, the Tribunal granted opportunity to the petitioner to seek restoration of the appeal if it deposit Rs. 40,000/- on or before 12-9-99. The petitioner did not deposit the amount in question and has approached this Court. 3. Mrs. Indira Nair, learned Additional Standing Counsel for Union of India has raised preliminary objection with regard to the delay and laches on the part of the petitioner. 4. Having heard Mr. Ramesh Shrivastava learned Counsel for the petitioner and Mrs. Indira Nair, learned Counsel for the respondents. I am inclined to grant an opportunity to the petitioner. If the petitioner deposits Rs. 40,000/- by 7-5-2001 the Customs, Excise and Gold Control Appellate Tribunal shall restore the appeal in question and hear the same on merits. It will be open to the petitioner to seek any other interim relief as may be advised before the Appellate Tribunal. With the aforesaid direction the writ petition stands disposed of.
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2001 (3) TMI 122
... ... ... ... ..... lants Agents may have given the classification in accordance with the wishes of the authorities or they may even be under some misapprehension. But when law allows them the right to ask for refund on a proper appraisement and which they actually applied for, we do not attach any significance to this aspect of the matter pointed out by Counsel. 3.It has been argued before me that what the petitioner is claiming is refund of the relevant one year in which the representation in question was made. I am in agreement with the order passed by Appellate Collector of Excise dated 5-7-74. In view of the trade notices of the respondents as well as circulars of the respondents as mentioned above the classification put by the respondent under Tariff Item 26AA(iii) was not proper. The same was to be treated as bars. The order of the Joint Secretary, Government of India is set aside. The petitioner shall be entitled for the consequential relief. 4.Petition is allowed. Rule is made absolute.
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2001 (3) TMI 121
Issues involved: Alleged suppression of production and clandestine removal of goods during 1981-86, violation of Rule 173E of Central Excise Rules, failure to consider relevant evidence, denial of fair opportunity to present case.
Alleged Suppression of Production and Clandestine Removal: The Tribunal and Commissioner found that there was suppression of real production and clandestine removal of goods during 1981-86. The proprietor and his employee admitted to production exceeding what was recorded in the RG 1 register. Statements from buyers also confirmed receipt of unaccounted quantities from the petitioner's factory. Movement of unaccounted goods from the factory was evident. The decision was based on a combination of factors, not solely on electricity consumption.
Violation of Rule 173E of Central Excise Rules: The counsel argued that the guidelines in Rule 173E were ignored, citing the number of employees and electricity consumption as insufficient for the alleged production quantity. However, the Court noted that determining production solely based on electricity consumption certificate while ignoring other evidence of clandestine production is unsafe. There is no rule mandating acceptance of claimed power utilization as the limit for production capacity.
Failure to Consider Relevant Evidence: The counsel referred to a Kerala High Court judgment stating that failure to consider proper material vitiates the order. However, the Court found that the authorities had considered and appreciated all relevant facts in reaching their decision. The petitioner had the opportunity to present its case before the Tribunal, which thoroughly evaluated the contentions but found them unconvincing.
Denial of Fair Opportunity: The petitioner claimed unfairness due to an adjournment request being denied when counsel was in Delhi for another case. The Court held that parties and their representatives are expected to be present for proceedings, and the petitioner had sufficient chances to present its case. The Tribunal's decision was based on merit and did not warrant interference under Article 226 of the Constitution.
In conclusion, the High Court dismissed the writ petition, finding no grounds for interference with the Tribunal's order.
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2001 (3) TMI 120
... ... ... ... ..... ling of watch movements. He is on bail in those cases also and as such, it can be safely presumed that if he is released on bail in this case, he would continue his smuggling activities, which have the effect of eating into the vitals of the economy and retarding the progress of the nation. Such offenders do not deserve any leniency whatsoever and have to be dealt with sternly. 7.In the result, I am of the considered view that the petitioner, who appears to be involved head and shoulders into smuggling of watch movements, in which he trades, does not deserve to be enlarged on bail. The petition, therefore, stands dismissed. 8.The trial Court however is directed to proceed with the complaint expeditiously so as to ensure that not more than 15 days adjournment is ever given in the case unless there are vacations and the trial is completed within one year. 9.Nothing stated herein shall be taken as an expression of opinion on the merits of the case pending before the trial Court.
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