Customs, Excise and Gold Tribunal - Calcutta
M/S Indian Rayon & Industries Ltd. Unit: ... vs C.C., Calcutta on 8 February, 2000
Equivalent citations: 2001(129)ELT682(TRI-KOLKATA)
ORDER
S.N. Busi
1. In this stay petition M/s Indian Rayon and Industries Ltd. (Unit: Jaya Shree Textiles), Rishra makes a prayer for waiver of the condition of predeposit of customs duty of Rs.39,61,655/- confirmed vide Order-in-Original No.66/99 Commr. dated 20.9.99 of Commissioner of Customs, Kolkata.
2. The applicant/appelant had exported in 1997 and 1998 one consignment of woollen yarn and three consignments of polyester yarn under claim for DEEC and DEPB respectively. The claim for DEEC in respect of woollen yarn and the claim for one of the exports of polyester yarn were, however, withdrawn by the applicant/appellant. Some of the goods exported were rejected by the foreign buyers on the grounds of processing defects and were accordingly reimported in 3 shipments. The same were cleared by the applicant/appellant without payment of customs duty after executing 3 re-export bonds in terms of Notification No.158/95-Cus. The re-imported goods were removed directly to the applicant's factory under intimation to the jurisdictional Central Excise authority. While a part of the goods reimported was re-exported in terms of the bond executed, the other goods could not be so re-exported due to worldwide rececssion in textile industry. The DEPB credit taken against two shipments of polyester yarn was also refunded to the DGFT as per the provisions of the Exim Policy. As the condition of re-export was no fulfilled, the applicant/appellant was served with 3 Show-cause Notices for realisation of the customs duties in terms of the bonds executed and also proposing confiscation of the goods and imposition of penalty. After receipt of the replies, the applicant/appellant was granted personal hearing on 16.9.99. Thereafter, Commissioner of Customs, Kolkata has passed the impugned order on 20.9.99 wherein he confirmed the total duty demand of Rs.39,61,655/- in terms of Section 28 of the Customs Act, 1962 read with the three bonds executed by the applicant/appellant. Being aggrieved by the said order, the present appeal has been filed along with the stay petition.
3. Shri D.K. Saha, learned Consultant, assisted by Shri M.N. Biswas, learned Consultant, appearing for the applicant/appellant, submits that although the Commissioner had allowed the benefit of Notification No.94/96 to the goods for which the DEEC benefit was not finally availed of, he did not extend similar benefit to the goods in respect of which DEPB benefit was not availed of thus making a discrimination between the two cases poised similarly in the matter of export. The learned Consultant argues that the Commissioner has erred in denying the benefit of Notification No.94/96 to the goods in respect of which the DEPB credit was refunded to the DGFT on the alleged ground that because of reimportation, the export is non-est and failed to appreciate that in such situtation the duty liability devolves on the goods actually cleared against such DEPB credit and not on any other goods. The Commissioner has also erred in holding that the refund of the DEPB credit to the DGFT dos not represent payment of customs duty. The learned Consultant argues that whereas the object of the DEPB credit is to neutralise the incidence of customs duty on the deemd input contents of the export product, but in effect it is customs duty only. Further, the Commissioner failed to note that Notification No.94/96 is not fettered by any condition of the DEPB and hence applicable to the reimported goods irrespective of export under the DEPB. The learned Consultant, therefore, pleads that the applicant/appellant has prima facie a good case in their favour for grant of unconditional stay. Apart from merits of the case, the learned Consultant presses the plea of undue financial hardship. He argues that due to low market demand the product of textile product has gone down and during 1998-99 the main unit of the applicant/appellant had incurred a net loss of about Rs.12.48 Crore and there is a huge amount of overdraft on bankers. He, therefore, pleads that predeposit of any amount of duty will cause undue financial hardship to the applicant/appellant and hence prays for dispensing with predeposit of the said duty amount in terms of the proviso to Section 129E of the Customs Act, 1962.
4. Shri V.K. Chaturvedi, learned SDR appearing for the Revenue, while reiterating the reasoning contained in the impugned order opposes the said prayer of the applicant/appellant.
5. After giving our careful consideration to the submission made from both sides, we are of the view that by the arguments of the learned Consultant as recorded in para 3 supra, a prima facie case has been made out in favour of the applicant/appellant for dispensing with predeposit of the said duty and unconditional stay of its recovery. Ordered accordingly.
6. The Stay Petition is thus allowed unconditionally.