9911796707
TMI Blog2008 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... th 1708 of 2008 - - - Dated:- 6-8-2008 - M.S. Shah, Actg. C.J. and D.H. Waghela, J. S/Shri V. Sridharan with B.L. Narasimhan and Abhiskej Anand, for the Petitioner. Shri Harin P. Raval, for the Respondent. [Judgment per : D.H. Waghela, J.].- The petitioner has invoked Article 226 of the Constitution with the prayer to set aside orders dated 30-8-2007 and 10-12-2007 of the Customs, Excise Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad ("CESTAT" for short) and order-in-original dated 30-3-2007 of the Commissioner of Customs, Kandla ("the Commissioner" for short). By the latter order, the Commissioner has, inter alia, confirmed demand for duty amounting to Rs. 201,80,46,133/- under Sections 3(1) and 11A of the Central Excise Act, 1944 and imposed penalty of the like amount; also confirmed demand for duty amounting to Rs.1,05,17,210/- under the proviso to Section 28 of the Customs Act, 1962, imposed penalty of the like amount and imposed penalties upon several companies and individuals on various other counts. Challenging that order-in-original before CESTAT in appeal, the petitioner has also filed application for stay with prayers not to insist upon pre-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years without availing any benefit of any kind in setting up the unit or procuring raw material. The export was either by removing oil directly to the port or mostly after storing in tank near jetti notified for loading and unloading of liquid cargo. In short, all the operations for export were under the surveillance of customs authorities and independent surveyors and, during the relevant period, the company had exported goods worth more than Rs. 600 crores out of which goods of the value of Rs. 300 crores were exported from the zone under physical control of the department. 3.1 Various premises of the petitioner were searched on 12-1-2004 by officers of Directorate of Revenue Intelligence and several statements were recorded and panchnamas were drawn. Pursuant thereto, show cause notice dated 27-7-2004 was issued and communications had ensued. After affording to the petitioner reasonable opportunities of being heard, the first impugned order-in-original dated 30-3-2007 was made by the Commissioner. 3.2 According to the aforesaid elaborate impugned order dated 30-3-2007 of the Commissioner, admittedly, both the units of the petitioner produced castor oil intended for exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that undisputably castor oil was removed from the zone by filing AR.4/TP for export even while the vessels through which export was meant had sailed off. The allegation that AR.4/TP was prepared without giving any reference of the shipping bill through which goods would cross the customs barrier was not rebutted by the petitioner. The entire scheme of dealing with the goods, once they were removed by either of the units, was clearly intended to ensure that nobody was in a position to ascertain the origin of such goods. Thus, in short, it was found that the petitioner had removed goods from the zone for export with a view to earn DEPB benefit even if the goods were produced at either of the petitioner's units. 3.5 As for demand of duty amounting to Rs. 13,52,72,384/- on 4574.640 MT castor oil valued at Rs. 13,78,28,121/- on account of removal of castor oil under AR.4 without filing any corresponding shipping bill during the period from August 1999 to December 2003, it was urged before the Commissioner by the petitioner that the goods may be treated as export by Bhachau unit. That plea was found to be not acceptable in absence of any enabling provision to cover up the legal ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have been cancelled by the DGFT authorities. In view of such prima facie findings, the petitioner was held to have not made out a strong prima facie case for total waiver of the dues as per the order-in-original. But, taking into account the financial hardship, the petitioner was directed to deposit 15% of the duty demanded from them; and subject to such pre deposit, balance duty and penalties were waived and recovery thereof was stayed. 5. It was stated at the bar that, due to failure of the petitioner in making pre-deposit, recoveries were being made by attaching properties of the petitioner, even as the petitioner had made fresh applications for being registered and recognized as a sick unit before BIFR after rejection of its first application on the grounds, inter alia, of acts of misappropriation and mis representation by the company. A grievance is also made by filing an additional affidavit of the director of the petitioner-company stating that their entire factory in the zone, including plant and machinery, worth Rs. 7.22 crores, are under detention of the customs authorities and they are not permitted to effect any export clearances of the goods for third parties on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the negative as per audited balance sheet as on 31-3-2007 and the company was again registered with B.I.F.R. for being declared as sick. 6.1 Learned counsel for the petitioner relied upon order dated 7-3-2007 of the Supreme Court in Sagarika Acoustronics Pvt. Ltd. v. Union of India pointing out the direction to the Tribunal that it should record its findings regarding the net worth of the company and, if it were found to be negative, it should re-consider restoration of the appeal. It was submitted that total plant and machinery of both the units of the petitioner worth Rs. 22.47 crore have already been detained and attached and the petitioner had no objection to the attachment being continued till disposal of the appeal. However, it was not possible for the petitioner to comply with the condition of pre-deposit of 15%. 7. By filing an affidavit of Specified Officer of Customs, KSEZ, it is submitted for the respondent that the petition under Article 226 of the Constitution was not maintainable as the petitioner had availed of statutory alternative efficacious remedy wherein only a discretionary order granting interim relief in favour of the petitioner was made. It was after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shipment on which the oil was claimed to have been exported. It was claimed on behalf of the petitioner that all such castor oil cleared after the date of sailing of the ship, which was declared as the vessel for export, was subsequently exported on other vessels; but no such evidence was found or produced. 7.2 Mr. Raval further submitted that balance sheet of the petitioner indicated that the company had been each year making sales to local markets. The company had removed castor oil in an indiscriminate manner by resorting to various irregularities. 7.3 Mr. Raval also submitted that waiver of pre-deposit is only an exception since, in view of the provisions of Section 129E of the Customs Act, it is mandatory that duty and interest demanded in respect of goods which are not under the control of Customs authorities, have to be deposited. The allegation of violation of principles of natural justice was elaborately considered by the Tribunal at the time of disposal of the modification application. He submitted that the ground of sickness and financial hardship was not available to the petitioner as the petitioner had approached B.I.F.R. only with a view to seeking protection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. [2007 (218) E.L.T. 164 (S.C.), while dealing with challenge to an order relating to pre-deposit, the High Court would not be justified in going into merits and expressing its view on the subject-matter in appeal before the Tribunal. 10. Having regard to the huge liability imposed upon the petitioner by the order-in-original and even 15% of the demand of duty being an amount larger than the total assets of the company as also in view of the statement at the bar that, with co-operation of the parties, the appeal could be heard and disposed by the Tribunal within a short time and in view of the other reliefs already granted by the Tribunal, we deem it just and proper to modify the impugned order of pre-deposit by the order as under: (a) The impugned order dated 30-8-2007 shall stand modified to the extent that, instead of 15%, the petitioner shall be required to deposit 10% of the duty amount on or before 30-8-2008; (b) The parties shall appear before the Tribunal on such date as may be fixed by the Tribunal, on or before 30-8-2008; and (c) If the amount is deposited as aforesaid, the Tribunal shall take up for hearing the appeal of the petitioner, as far as practic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
