Customs, Excise and Gold Tribunal - Tamil Nadu
Sab Nife Power Systems Ltd. vs Commr. Of Cus. on 24 February, 1999
Equivalent citations: 1999(112)ELT55(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. For the purpose of hearing the appeals, the appellants are required to pre-deposit a sum of Rs. 60,49,0687- and penalty of Rs. 5,00,000/- This is a second round of litigation. Initially, show-cause notice dated 29-11-1994 was adjudicated in the appellants favour, however, the matter was reviewed by the Board and an appeal was filed before the Tribunal. The said appeal was remanded for de novo consideration and on the said de novo consideration, the Commissioner has confirmed the demand being the appellants' benefit of Notification No. 206/76 in respect of batteries imported by them was for the use in the ground handling equipments of air-crafts for defence use. There are three grounds on which the said benefit of notification has been denied:
(i) that the batteries does not form part of the ground handling equipments of air-crafts for defence use;
(ii) that the certificate issued by the authorised signatory of Ministry of Defence is not a valid certificate; and
(iii) they have mis-used the Modvat credit benefit.
2. The learned Advocate submits that the batteries form part of ground handling equipments of air-crafts for defence use. In this regard, he points out to the Chennai Custom House Public Notification No. 45/90, dated 18-1-1990, which clarifies that batteries are eligible for exemption under the said notification as the air-craft parts, if imported for the use of defence air-crafts. He submits that the said certificate issued by the Ministry of Defence is a valid one and large number of supporting evidence was produced, which had not been considered by the Commissioner. It is further stated that an opportunity to cross-examine the officials of Ministry of Defence to conclusively prove the contract was not offered by the Commissioner and the reasons given are not sufficient from the order and hence it is a violative of principles of natural justice. He further submits that the original certificate was already in the possession of the department and what had been exhibited before the authorities was only a photocopy on which signature was not legible and the Commissioner has wrongly proceeded on the statement of the Purchase Officer of M/s. HAL, which is not at all conclusive in the matter.
3. The learned Advocate further submits that the demands are barred by time as the imports made in 1991 on which all the relevant information had been furnished. He submits that there is no plea of financial hardships by the appellants.
4. The learned DR submits that there is no violation of principles of natural justice in the matter, as the batteries does not form part of the ground handling equipments of air-crafts and that the certificates produced were not sufficient and the statement of Sri Balasubramaniam indicated that the appellants have not satisfactorily explained about they are having contract with M/s. HAL. He points out that the Commissioner has given a detailed findings on all aspects. He also points out that Modvat credit has been wrongly taken in the matter and hence on all counts, they are not entitled for the exemption under the said notification and as there is no plea of financial hardships, the appellants should be directed to make partial deposit in the matter.
5. On a careful consideration of the submissions on both sides, prima facie, we are of the considered view that in this matter the appellants have succeeded in the first round. However, on remand, the Commissioner has taken a different view and while doing so, he has not given the appellants full opportunity to show that they had registered a contract with Ministry of Defence for procuring batteries for supply as a part of ground handling equipments for air-crafts. Further, we notice that prima facie, imports were made in 1991 and the show cause notice issued in 1994 and there is no clear cut findings given by the Commissioner as to how larger period is invokable in the matter when in earlier adjudication proceedings, the Commissioner has given a conclusion that demands were barred by time.
6. Taking into consideration the over all facts and circumstances of the case, we are of the considered opinion that the appellants have a strong prima facie case for granting waiver of pre-deposit and stay of its recovery. Ordered accordingly.
7. As the revenue involvement is more, either side may move an application for early hearing which would be considered.