2013 (10) TMI 951 - AT - Customs

Refund Claim Stay Application - The assessee had achieved only 44% of the export obligation during the relevant period, the proportionate duty foregone to the extent of the unachieved portion of the export obligation and interest till the date of payment of duty has to be paid - the assessee filed a refund claim on the ground that the appellant had fulfilled the entire obligation of duty payment on de-bonding, if they pay an amount equal to 56% of the duty liability - The Commissioner (Appeals) accepted this stand and has allowed the refund claim to the assessee Held that - For the units who continue to function and would like to clear a portion of the capital goods on payment of duty, paragraph 4 is to be applied whereas where the duty is being demanded at the time of closure of the unit, paragraph (3)(d)II) of the Notification would apply - I am not convinced with the arguments advanced by the learned counsel - If this is correct, where a unit achieved export obligation within first year or second year, they need not pay any duty - This interpretation does not follow from the notification - ground taken by the department is prima facie correct - the department has made out strong prima facie case in their favour - the stay is required to be granted the order is stayed as prayed by the department Stay granted.

Summary

Issues:
1. Eligibility of the appellant for refund on merits.
2. Requirement of stay on the refund claim.

Analysis:
1. The case involved an International Call Centre and a unit for software development and IT services that decided to de-bond. The appellant had paid duty and interest for unachieved export obligations. A refund claim was filed, contending fulfillment of duty payment obligations upon de-bonding. The Commissioner (Appeals) allowed the refund claim. The Revenue appealed, arguing against the refund eligibility. The Notification No. 52/2003-Cus conditions were examined, particularly regarding duty payment on de-bonding and depreciation of capital goods. The appellant's argument that paragraph 4 applied only to units not completely de-bonding was rejected. The Tribunal found the Revenue's argument prima facie correct, granting a stay on the refund claim.

2. The Additional Commissioner contended the appellant was not eligible for a refund on merits, seeking a stay. The Tribunal analyzed the Notification No. 52/2003-Cus conditions, focusing on duty payment requirements for de-bonding units. It was observed that the appellant's interpretation would render paragraph 4 redundant, as units meeting export obligations early would not pay duty. The Tribunal found the Revenue's argument convincing, granting a stay on the refund claim. Other issues raised were deferred for final hearing, as the prima facie case for granting a stay was established.

This detailed analysis of the judgment highlights the issues of refund eligibility and the requirement for a stay on the refund claim, delving into the legal interpretations of the relevant notifications and the arguments presented by both parties.