Customs, Excise and Gold Tribunal - Tamil Nadu
Sol Pharmaceuticals Ltd. vs Commissioner Of Customs, Chennai on 25 September, 2001
JUDGMENT
S.L. Peeran
1. By this stay application, the applicant is seeking waiver of pre-deposit of Rs. 2,71,07,915/- which has been confirmed in the impugned order passed by the Commissioner of Customs (Airport), Chennai in terms of proviso to Section 28(A) of the Customs Act.
2. Ld. Consultant Shri M.S. Rajappa submits that appellant company has been declared as sick unit by the BIFR and in terms of the Apex Court in SANG FROID REMEDIES LTD v. UOI case reported in 1988 (103) ELT 5 SC and also in the case of DANWI TISSUES LTD. v. CCE - 1995 (80) ELT 12 (SC), waiver is required to be granted including the stay of recovery when the company has been declared as sick unit by the BIFR. The Hon'ble Apex Court set aside the order of pre-deposit passed by CEGAT and directed the CEGAT to hear the appeal. He submits that in this matter waiver be granted and matter be heard. He further submits that on the ratio of the Hon'ble Apex Court judgment, the Tribunal has been giving waiver where it is shown that the company has been declared as sick unit.
3. In so far as confirmation of the demand is concerned, he files a chart by which the working out has been arrived at and shown that they have fulfilled the terms of export obligation and if the working out is redone, the amounts approx. would be Rs. 1,52,543/-. He submits that they are also entitled for the benefit of modvat credit which should be to the extent of 25% of the duty amount. He further submits that in view of various difficulties faced by the appellants, there was no intention to evade duty and penalty is not leviable in terms of large number of judgments. He contends that they are prepared to produce all the evidences with regard to fulfillment of export obligation and the matter could be remanded to the Commissioner to work out the duty element and also to consider the plea that no penalty is leviable in the matter in view of appellants not having intention to evade duty or to misuse the export obligation benefits taken by them. He is prepared to produce evidence to support their pleas for non-levy of penalty. He submits that his prayer has not been looked into and hence matter could be sent back for re-working out of the amounts as indicated by them in the statement produced.
4. Ld. DR submits that in so far as waiver was concerned, the Revenue was bound by the Supreme Court judgment but with regard to the prayer of remand, he prays time so that he can get a detailed report from the Commissioner. He, therefore, seeks time to argue the matter at the final hearing.
5. On a careful consideration of the submissions made by both sides, and having considered the Apex Court judgment and the Tribunal rulings placed before us, we are of the considered opinion that in view of appellants having been declared as a sick unit by the BIFR, therefore the plea for waiver and stay of recovery of the amounts is required to be accepted by allowing the stay application. Thus, the stay application is allowed.
6. The prayer of the Consultant for remand is justified as the issue lies in a short compass. Therefore, we take up the appeal for consideration. The Ld. Commissioner has confirmed the demands on the plea that they have not fulfilled the export obligation in respect of 9 Advance Licences mentioned in the show cause notice. The Ld. Consultant has filed statement and chart to indicate that they have fulfilled the export obligation in respect of five licences and duty liability will not be 2,71,07,915/- but would be much less than Rs. 15,25,430/-. It is his contention that appellants would produce the evidence at the time of hearing, which they are now prepared to produce all the evidence and demonstrate before the Commissioner that they have fulfilled the export obligation in respect of 5 Advance Licences. There is some merit in this submission. Appellants should be given an opportunity to show that they have completed the export obligation. In such an eventuality, the amount would come down considerably. Therefore, we are of the considered opinion that the prayer of remand is justified. Therefore, we set aside the impugned order and remand the matter to the Commissioner of Central Excise with a direction that appellant's evidence with regard to fulfillment of export obligation in respect of 5 advance licences should be taken into consideration in the proceedings and the evidence be reconsidered and benefit given on that aspect.
7. Further prayer to reconsider the grant of modvat credit should be taken up by the Commissioner and decided in the light of Apex Court judgment relied by the Appellant. Further prayer that no penalty is leviable in this matter is required to be reconsidered by the Commissioner and the matter decided de novo. Thus, the impugned order is set aside and the matter remanded for de novo consideration in the light of submissions that would be made by the appellants and evidence that would be led by them. The Ld. Commissioner shall observe principles of natural justice before passing a considered order. Appeal is allowed by way of remand.
(Dictated & Pronounced in Open Court)