Pre-deposit order - amendment of

PJ/Case Laws/2011-12/1540

Case: IDEAL EXPORTS Vs COMMISSIONER CUSTOMS ICD TKD

Citation: 2012-TIOL-61-HC-DEL-CUS

Issue:- Non-fulfillment of export obligation – Non-payment of duty for 11 years – Bank guarantee invoked by Department – some amount of customs duty due paid by assessee – pre-deposit of remaining customs duty in equal installments in extended period allowed considering the peculiar circumstances.

Brief Facts:- Appellant had imported 144.163 MTs of Brass Scrap in 1998. They did not pay any import duty on said scrap as the appellant had furnished an undertaking that they would fulfill the obligation of export of 134.105 MTs in form of builder hardware. As per notification, the appellant was required to submit details of exports made within one month from the expiry of the period of export obligation but this was not submitted.

Revenue contended that appellant had only fulfilled 14.977% of the export obligation and had exported brass hardware weighing 20.0849 MTs. The appellant had failed to account and meet the export obligation in respect to the balance brass scrap which was imported.

Thus, show cause notice was issued and demand of duty was raised.

Appellant had earlier filled an appeal against the adjudication order which was allowed by the Tribunal with a view to grant one opportunity to the appellant to produce evidence to show that they had fulfilled the export obligations. In spite of the said opportunity appellant could not produce evidence to show that they had fulfilled the export obligation and had exported hardware of the requisite quantity.

In appeal, the Tribunal directed appellant to deposit the balance amount of the customs duty which was payable on the un-exported quantum of the brass scrap. Appellant invoked the bank guarantee and have recovered Rs. 7, 95, 186/- and the appellant had paid Rs. 3 lakhs on 22.02.2008 as pre-deposit when the eralier appeal was filed. Appellant was to make the payment of Rs. 10, 28, 337/-. The Tribunal directed the appellant to make this payment.

Thus, the Tribunal dismissed the Miscellaneous Applications filled by appellant in which prayer was made that the order dismissing their application for waiver of pre-deposit should be recalled and complete waiver of pre-deposit should be made.

Aggrived by the order of the Tribunal, appellant are in appeal before the High Court.

Appellant’s Contention:- Appellant contended that the Tribunal has failed to consider the legal position that the appellant had achieved 67.9% of export requirement in value of terms. It was further submitted that they have passed through very difficult times and is almost in a mental wreck. Lastly it was submitted that appellant may be granted time to make payment of the pre-deposit in monthly installments of Rs. 50, 000/- each.

Respondent’s Contention:- As per the respondent the appellant had only fulfilled 14.977% of the export obligation and had exported brass hardware weighting 20.0849 MTs.

Reasoning of Judgment:- The High Court held that from facts shortfall in export was established. It was noted that the the customs duty, interest etc. have remained unpaid for last 11 years as the export obligation, as per license had expired on 5.11.2000.

It was held that the contention of the appellant that the authorities have failed to examine the plea with regard to FOB value is not correct as the Commissioner of Customs has specifically examined and rejected the same. It was noted that the Commissioner had held that it was necessary for the appellant to export the reqyuuired quantity in MTs. The requirement of value addition is an additional requirement and not the primary condition or an alternative condition. The primary condition as the per the Commissioner is the requirement to fulfill the quantity requirement i.e. in MTs. It was held that the appellant has not produced before the Court the notification under which the duty free import was made and has not tried to establish and show that the value addition requirement is a primary condition and not the additional requirement.

With regard to request for extending time limit of making payment of balance amount of customs duty as pre-deposit, the High Court granted extension of 3 months considering the peculiar circumstances and hardship of the appellant.

Decision:- Appeal disposed off accordingly.

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PJ/Case Laws/2011-12/1540

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