Custom, Excise & Service Tax Tribunal
M/S. Swarna Electricals vs Cc, Bangalore on 20 March, 2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:20/03/2013
Date of decision:20/03/2013
Application No.C/Stay/810, 809/2012
Appeal No.C/1184, 1183/2012
(Arising out of Order-in-Appeal No.22/2012/CUS(B) dt. 16/02/2012 passed by CC(Appeals), Bangalore)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
Honble Mr. B.S.V. Murthy, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Swarna Electricals
Mr. A.S. Prabhakar
..Appellant(s)
Vs.
CC, Bangalore
..Respondent(s)
Appearance Mr. Lakshmi Narayan, Advocate for the appellants.
Ms. Sabrina Cano, Superintendent(AR) for the respondent.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) Honble Mr. B.S.V. Murthy, Member(Technical) FINAL ORDER No._______________________ [Order per: P.G. Chacko] The appeals and stay applications are directed against Order-in-Original No.13/2010-11 dt. 31/03/2011 and Order-in-Appeal No.22/2012 dt. 16/02/2012. In adjudication of a show-cause notice dt. 31/12/2008 issued under Section 124 of the Customs Act, 1962, the Additional Commissioner of Customs confirmed demand of differential duty of over Rs.43 lakhs against M/s. Swarna Electricals (appellant in appeal No.C/1184/2012) in respect of 20 Bills of Entry covering import of induction cooker, chimneys, gas water heater and accessories, demanded interest on duty, ordered confiscation of the goods covered by 3 Bills of Entry, imposed redemption fine of Rs.5 lakhs, imposed a penalty equal to duty on the importer under Section 114A of the Customs Act and imposed two penalties on Shri A.S. Prabhakar (appellant in appeal No.C/1183/2012) Rs.15 lakhs under Section 112 of the Act and Rs.5 lakhs under Section 114AA of the Act. An amount of Rs.17 lakhs deposited by the assessee during the course of investigations was appropriated by the adjudicating authority towards the confirmed demand of duty. Against the Additional Commissioners order, no appeal was filed by Shri A.S. Prabhakar. The appeal filed by M/s. Swarna Electricals has been rejected by the Commissioner(Appeals) on the ground of non-compliance with Section 129E of the Customs Act. At this juncture, before further discussion, we dismiss Mr. A.S. Prabhakars appeal No.C/1183/2012 along with the stay application filed by him.
2. The Commissioner(Appeals) had directed the assessee (M/s. Swarna Electricals) to predeposit an amount of Rs.35 lakhs, which was not predeposited by the party. Hence their appeal came to be dismissed as above.
3. After hearing both sides, we have not found prima facie case for M/s.Swarna Electricals. As per the Additional Commissioners order, the outstanding dues of duty amount to over Rs.25 lakhs. It is on record that, in the wake of issuance of the show-cause notice, the party had applied for settlement and that, before the Settlement Commission, they had admitted duty liability to the extent of ? of the total amount of duty demanded in the show-cause notice. In other words, the party admitted before the Settlement Commission that they were liable to pay duty of around Rs.14 lakhs and interest thereon. It is also on record that a few statements were recorded under Section 108 of the Customs Act from the authorized signatory of the assessee and that, in the final statement given by him, he admitted the entire duty liability. Apparently, on the basis of such admission, the show-cause notice proposed demand of differential duty of over Rs.42 lakhs. We further observe that the party did not cooperate with the Settlement Commission and hence the Commission rejected their application and sent the case for adjudication.
4. The learned counsel for the appellant has submitted today that their request for cross-examining the investigating officers was not considered and that certain contemporaneous imports of identical goods from the same supplier, cited by the appellant, were also ignored. The learned counsel has also filed copies of Profit & Loss account for three consecutive financial years (including 2011-12) in his endeavour to show that the appellant has financial hardships and hence may not be in a position to make any predeposit. The learned counsel has also produced a worksheet which works out the duty liability at around Rs.12 lakhs.
5. The learned Superintendent(AR) has reiterated the findings of the original authority. She has particularly referred to the confessional statement of the authorized signatory and the Settlement Commissions order. She submits that the importer withheld the invoices showing correct values and filed another set of invoices with the relevant Bills of Entry in their bid to suppress the assessable value of the goods. She has also contested the plea of contemporaneous prices. It is submitted that no such plea was raised in the reply to the show-cause notice, nor any documentary evidence of contemporaneous prices comparable to the declared values produced. It is, therefore, submitted that the appellant ought to have predeposited the amount prescribed by the Commissioner(Appeals).
6. After giving careful consideration to the submissions, we have found valid points in the submissions of the learned Superintendent(AR). It is not in dispute that the authorized signatory of the assessee admitted the entire duty liability under Section 108 of the Customs Act. He never retracted his confessional statement. It is also on record that the assessee admitted duty liability, albeit only to the extent of ? of the duty liability set out in the show-cuase notice, before the Settlement Commission. The party did not cooperate with the said Commission and hence their bid to settle the dispute failed. Today, the learned counsel has not been able to make out a prima facie case on merits for the appellant. No contemporaneous import was referred to in the reply to the show-cause notice. No documentary evidence of any contemporaneous import was produced with that reply. On the other hand, the extent of admitted liability has come down to around Rs.12 lakhs vis-a-vis what was admitted by the authorized signatory before the investigators and subsequently before the Settlement Commission. In the circumstances, we are of the view that the assessee-appellant should predeposit appropriate amount under Section 129E of the Act. The Profit & Loss accounts submitted to us today by the learned counsel do not disclose any bad financial condition. These documents consistently display attractive amounts of net profit for three consecutive years upto March 2012. No other evidence of financial hardships is forthcoming.
7. In the totality of the facts and circumstances of this case, we direct the appellant in appeal No.C/1184/2012 to predeposit an amount of Rs.20 lakhs (Rupees twenty lakhs only) within six weeks and report compliance to the Commissioner(Appeals) on 22/05/2013, whereupon the learned Commissioner(Appeals) shall dispose of the assessees appeal filed against the Order-in-Original, on its merits in accordance with law and the principles of natural justice, untrammeled by the observations made by us on merits hereinbefore. It is made clear that all issues are open to be addressed by the appellate authority. The stay application filed by M/s. Swarna Electricals also stands disposed of.
8. Both the appeals are disposed of.
(Pronounced and dictated in open court) (B.S.V. MURTHY) MEMBER (TECHNICAL) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 7