2015 (2) TMI 823 - AT - Customs

Waiver of pre-deposits - Non compliance of condition No. 40 of Notification No. 21/2002-Cus - Imported Machine is not eligible machine & also not used for specified purpose - Held that - As the Condition 40 of the Notification, a person is eligible to import road construction machinery having a contract for construction of roads awarded by the National Highway Authority of India and is further debarred from disposing of the machines for five years and it is to be exclusively used for road construction.In the present case, the applicants were having a contract for road construction awarded by the National Highway Authority of India. Further, during the execution of the contract, a dispute arose and the matter was referred to arbitrator and ultimately cancelled the contract by the National Highway Authority of India and the machines were also seized by the Authority and subsequently released. There is no evidence on record to show that the applicants disposed of the machines and not used for the specified purpose. In Appeal E/86834/13 the eligibility of the machine i.e. Electronic Road Paver Finisher, the issue is before the Larger Bench of the Tribunal. In these circumstances, we find that the applicants have made out a case for total waiver of the dues. - stay granted.

Summary

Issues:
- Waiver of pre-deposit of dues under Notification No. 21/2002-Cus
- Eligibility for exemption from Customs duty under Condition No. 40 of the Notification
- Failure to fulfill conditions of the Notification leading to demand of Customs duty
- Dismissal of appeals for non-compliance with provisions of Section 129E of the Customs Act, 1962

Analysis:
The judgment involves the consideration of applications for waiver of pre-deposit of dues under Notification No. 21/2002-Cus. The applicants, a Public Sector Undertaking, imported goods specified in List 18 of the Notification for road construction. The central issue revolved around Condition No. 40 of the Notification, which required the importer to use the goods exclusively for road construction and not dispose of them for five years from import. The Revenue contended that the machines were not used for the specified purpose, leading to the demand for Customs duty.

The applicants argued that they had a contract for road construction with the National Highway Authority of India, but due to disputes, the contract was canceled, and the machines were seized and later released. They maintained that there was no evidence of misuse or disposal of the machines. Additionally, the eligibility of one machine under the Notification was pending before a Larger Bench. The Tribunal found that the applicants had a case for total waiver of dues, as they had not violated the conditions of the Notification.

The judgment emphasized that the Notification provided an exemption from Customs duty for goods required for road construction. It highlighted that under Condition 40, importers with contracts for road construction awarded by the National Highway Authority of India must use the machinery exclusively for road construction without disposal for five years. Since the applicants met these criteria and the matter was pending before a Larger Bench, the Tribunal granted a waiver of the dues and remanded the case to the Commissioner (Appeals) for a fresh decision without pre-deposit.

The Appeals Tribunal set aside the earlier orders, directing a fresh decision without insisting on pre-deposit and providing an opportunity for personal hearing. The judgment concluded by disposing of the appeals and stay applications in the mentioned terms, ensuring a fair consideration of the case without the burden of pre-deposit requirements.