2005 (98) ECC 153 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Alsa Marine & Harvests Ltd.

Versus

Commissioner of Central Excise, Chennai

E/PD/283/2004 in Appeal No. E/569/2004

Stay Order No. 768/04
Final Order No. 1024/02 dt. 16.11.2004, Certified on 9.12.2004

Central Excise Act, 1944

Section 35F -- Non-compliance -- Notification No. 64/88-Cus dated 1.3.1988 -- Plea of financial hardship for non-deposit -- Held, a pre-deposit of Rs. 6 lakhs will serve the purpose of Section 35F of the Central Excise Act in this case. The Commissioner (Appeals) is directed to dispose of the assessee's appeal on merits in accordance with law and the principles of natural justice in the event of the appellants predepositing the aforesaid amount of Rs. 6 lakhs within the stipulated period. The impugned order is set aside and this appeal is allowed by way of remand.

[Paras 4 & 5]

Appeal is allowed

PRESENT :

Shri B. Satish Sundar, Adv. for the appellant.

Smt. R. Bhagya Devi, SDR for the respondent.

Cases Cited :

1. Asian Exports v. Commissioner of Customs, ICD, TKD, 2002 (145) ELT 702 (Tri.-Del.) [Para 2]

2. CC (Import), Mumbai v. Jagdish Cancer & Research Centre, 2001 (46) RLT 121 (SC) [Para 4]

3. Commissioner of Customs, New Delhi v. C.T. Scan Research Centre (P) Ltd., 2003 (89) ECC 231 (SC) [Paras 3 & 4]

4. Dewan Chand Satyapal Agarwal I.R. Centre v. CCE, New Delhi, 2001 (136) ELT 1116 (Tri.-Del.) [Paras 2 & 4]

Per : P.G. Chacko (Oral)

Aftex examining the records and hearing both sides, we are of the view that the appeal requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to dispose of the appeal.

2. The appeal is against an order of the Commissioner (Appeals) rejecting the assessee's appeal for non-compliance with Section 35F of the Central Excise Act. The lower appellate authority, by an interim order dated 30.12.2003, had directed the party to predeposit an amount of Rs. 10 lakhs out of an amount of over Rs. 25 lakhs for the purpose of Section 35F ibid., but they did not deposit the amount. Later, Ld. Commissioner (Appeals) passed the impugned order. Hence, the present appeal.

2. Ld. Counsel for the appellants has claimed to have a strong case on limitation and has relied on the Tribunal's decisions cited below:

--(i)

--Dewan Chand Satyapal Agarwal I.R. Centre v. CCE, New Delhi, 2001 (136) ELT 1116 (Tri.-Del.)

--(ii)

--Asian Exports v. Commissioner of Customs, ICD, TKD, 2002 (145) ELT 702 (Tri.-Del.).

--Ld. Counsel submits that the said demand of duty was raised in a show-cause notice dated 27.6.2003 in relation to imports made in July-Aug. `97 duty-free, claiming exemption under Notification No. 32/97-Cus. It is submitted that such a demand is heavily time-barred having regard to the provisions of Section 28 of the Customs Act. It is further submitted that the appellant-Company is in a financial crisis and has already been declared sick by the BIFR.

3. Ld. SDR submits that the imports of squids and shrimps effected by the assessee in terms of the Notification were cleared on the strength of bonds executed by them binding themselves to pay duty on the goods (in the event of violation of conditions of the Notification) upon demand by the Department and, therefore, the period of limitation prescribed under Section 28 is not applicable to this case. Ld. SDR relies on the Supreme Court's decision in Commissioner of Customs, New Delhi v. C.T. Scan Research Centre (P) Ltd., 2003 (89) ECC 231 (SC) : 2003 (57) RLT 1 (SC), wherein the period of limitation prescribed under Section 28(1) of the Customs Act was held inapplicable to a demand of duty raised on goods imported under Notification No. 64/88-Cus dated 1.3.1988. Ld. SDR has also referred to the case on merits and has submitted that the appellants had violated a major condition stipulated in the above Notification inasmuch as they had disposed of the goods without the knowledge or permission of the Customs/Central Excise authorities.

4. After considering the submissions, we find that violation of the condition referred to by the SDR is an undisputed fact in this case. Even in their letters to the departmental authorities, the appellants categorically stated that they had destroyed the unexported part of the finished goods without intimation to, or supervision of, departmental authorities. Again, it is not in dispute that the clearance of the imported goods was obtained on the strength of a bond executed by them binding themselves to pay, in the event of violation of conditions of the Notification, the Customs Duty payable on the goods as and when demanded by the Department. Ld. Counsel has not been able to bringforth any significant difference between Notification No. 64/88-Cus considered by the Tribunal in the cases cited by him and Notification No. 32/97-Cus involved in the instant case. Both the Notification provided for clearance of imported goods on execution of similar bonds by importer. The continuing liability of such an importer has been recognized by the Apex Court in the case of C.T. Scan Research Centre cited by Ld. SDR. Therefore, the plea of limitation, prima facie, cannot stand the test of binding case law. The decisions of the Tribunal cited by Ld. Counsel have also been considered by us. It is noticed that the Tribunal's decision in Dewan Chand Satyapal Agarwal (supra) is based on the earlier decision in Jagdish Cancer & Research Centre & CC (Import), Mumbai), 2000 (117) ELT 97 (Tri.). This decision in the case of Jagdish Cancer & Research Centre was subsequently reversed by the Apex Court in CC (Import), Mumbai v. Jagdish Cancer & Research Centre, 2001 (46) RLT 121 (SC). It was the view taken by the Apex Court in the case of Jagdish Cancer & Research Centre that was followed by the court in C.T. Scan Research Centre (supra). We have also considered the appellant's plea of financial hardships. It is stated that they are a sick unit so declared by the BIFR and that their application for debonding is also pending before the Customs authorities. We would like to take a lenient view, having regard to this factum of financial hardships. Accordingly, we are of the view that a pre-deposit of Rs. 6 lakhs will serve the purpose of Section 35F of the Central Excise Act in this case. They shall deposit this amount with the lower appellate authority within a period of eight weeks from today so that that authority can deal with their appeal on merits in accordance with law.

5. The impugned order is set aside and this appeal is allowed by way of remand. The Commissioner (Appeals) is directed to dispose of the assessee's appeal on merits in accordance with law and the principles of natural justice in the event of the appellants predepositing the aforesaid amount of Rs. 6 lakhs within the stipulated period.

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