Customs, Excise and Gold Tribunal - Ahmedabad
Hz. Khidhr Export (P) Ltd. And Shri Mobin ... vs Commissioner Of Central Excise And ... on 18 April, 2007
Equivalent citations: 2007(118)ECC446, 2007ECR446(TRI.-AHMEDABAD)
ORDER Archana Wadhwa, Member (J)
1. The prayer in the application is to dispense with the condition of pre-deposit of duty amount of Rs. 3,57,24,369/- confirmed against M/s. Hz. Khidhr Export (P) Ltd., a 100% trading EOU and penalty of identical amount imposed on the said applicants under the of Section 11AC. In addition personal penalty of Rs. 35 lakhs stands imposed upon the second applicant Shri Mobin Bilal Memon, Director.
2. The said demand of duty stands confirmed on the ground that the goods imported in terms of the Notification No. 1/95-CE dated 04/01/95 for the purposes of exports have actually not been exported and as per the investigations made by the revenue, the same have been shown to be exported to Bangladesh under forged documents.
3. Shri Willingdon Christina, Ld Advocate, appearing for the applicants does not dispute the above finding of the adjudicating authority. However, he assails the confirmation of demand on the point of limitation. By relying upon the various decisions of the Tribunal, he submits that inasmuch as the show cause notice was issued after the normal period of limitation from the completion of investigation, the same is barred by limitation.
4. On the other hand, the Ld. DR submits that it is a case of fraud, thus giving legitimate time limit of five years to the revenue to issue the show cause notice. In such type of cases, the importer cannot contend as to when the investigations were over and as to when the show cause notice should have been issued. In any case, he draws our attention to the fact that the appellants had entered into a bond B-17, at the time of import of the goods. Inasmuch as the appellants have failed to fulfill the condition of exports, the confirmation of demand of duty in terms of the said bond is appropriate and the question of limitation will not arise.
5. We have considered the submissions made by both sides. The Ld. Advocate has not contested the finding of fraudulent exports on the basis of forged documents. The only plea is that the demand is barred by limitation. The said plea stands discussed by the adjudicating authority as under:
The first submission is regarding the limitation i.e. the show cause notice is time barred.
The show cause proposes demand of duty in terms of Notification No. 1/95-CE dated 04/01/95 as amended and B-17 bond furnished by the unit and also under proviso to Section 11A of the Central Excise Act, 1944. From the records of the case it is observed that the unit had procured the goods under reference without payment of duty in terms of Notification No. 1/95-CE dated 04/01/95. The Notification No. 1/95-CE dated 04/01/95 is a conditional notification and goods cleared under this Notification are exempted subject to condition that unit will furnish a bond in the prescribed form with Asst Commissioner of Central Excise interalia binding itself to fulfill the conditions stipulated in the notification and export-import policy and in case of failure of so to do to pay on demand an amount equal to the duty leviable on the goods and interest on the said duty. In terms of the above mentioned notification the unit had furnished B-17 bonds for fulfillment of the condition of the notification and to pay the duty and interest in case of failure. The notification per se or the bond furnished by the Unit does not prescribe any time limit for raising the demand. Therefore, demand raised on this account vide show cause notice under reference is not barred by time limitation. As regards demand under Section 11A of the Central Excise Act, 1944 it seen that demand has been raised under the first proviso to sub Section (1) of the Section 11A of the Act ibid, which provides time limit of five years for raising the demand in cases where duty has not been paid by reason of fraud, collusion or any willful mis-statement or suppression of facts. In this case, unit had not paid the duty as the goods have been claimed to have been cleared for export. The unit in support of its claim that goods cleared by them have been exported had submitted copy of the shipping documents investigation in the matter show that the unit had not exported any goods and documents submitted by them are fake/forged. The unit themselves have admitted that the goods were never exported and were sold in DTA on cash basis. It is therefore clearly a case where duty has not been paid by resorting to fraud, willful mis-statement and suppression of facts. Therefore the duty not paid by the unit at the time of clearance is liable to demanded within the period of five years. As demand has been raised within the period of five years there is no merit in their submission that SCN is time barred. Contention that middleman/export agent were responsible for non export has no merit, since the obligation is cast upon the unit to export and not on any other person. It was for the unit to organize their affairs in a manner which fulfills statutory obligations cast on them.
6. As is clear from the above, the one of the condition of Notification was execution of bond, which can be discharged only on fulfillment of the export obligation. Inasmuch as export obligation have been found to be exported under forged documents, the appellants become liable to pay duty in terms of the said bond. The Ld. Advocate has fairly agreed that in none of the judgments relied upon by him, the fact of entering into a bond was available. As such, we prima facie hold that the ratio of the judgments is not applicable inasmuch as the facts are different.
7. We, further note that the appellant had not pleaded any financial hardship though it has been submitted before us that the unit is lying closed. No documentary evidence in support of the above contention has been placed before us. In any case, the appellants having imported goods worth crores of rupees and having diverted them clandestinely in the domestic market, without reflecting the considerations in the statutory documents, cannot be accepted to be in a poor financial condition. As such, we are of the view that the appellants should be put to some terms of deposit of duty as also of penalty. Accordingly, we direct the applicant/appellants to deposit an amount of Rs. 2.50 crores towards duty and an amount of Rs. 50 lakhs towards penalty subject to which the balance amount of duty and penalty and the entire amount of penalty on the second applicants shall stand waived and its recovery stayed during the pendency of the appeal.
8. The above deposit should be made within a period of 12 weeks from today and matter to be reported for compliance on 16/07/2007.
(Pronounced in Court on 18/4/07)