Custom, Excise & Service Tax Tribunal
M/S. Victory Soaps & Cosmetics Pvt. Ltd vs The Commissioner Of Customs (Appeals) on 13 March, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BANGALORE SOUTH ZONAL BENCH AT BANGALORE COURT - I Stay Application No.: C/Stay/1775/2011 in Customs Appeal No: C/2871/2011 (Arising out of Order-in-Appeal No: 102/2011 dated 23.9.2011 passed by the Commissioner of Customs, Bangalore.) 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. Victory Soaps & Cosmetics Pvt. Ltd. Appellant Versus The Commissioner of Customs (Appeals) Bangalore. Respondent
Appearance Ms. Rukmani Menon, Advocate for the appellant.
Ms. Sabrina Cano, Superintendent (AR) for the Revenue.
CORAM SHRI P. G. CHACKO, HONBLE MEMBER (JUDICIAL) SHRI B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing: 13.03.2013 Date of decision:13.03.2013 FINAL ORDER No. 25173 / 2013 [Order per: P. G. Chacko]. This application filed by the appellant seeks waiver of pre-deposit and stay of recovery in respect of the adjudged dues which include an amount of duty of Rs.20,76,404/- demanded in respect of palm kernel oil of industrial grade. The impugned demand is on account of denial of the benefit of Notification No.21/2002-Cus. [Sl. No.30(I)(B)]. At the time of import of the said goods, the appellant did not pay any duty, claiming the benefit of Notification No.21/2002-Cus. (Sl. No.33A). The party admitted that they were not entitled to clear the goods at nil rate of duty in terms of Sl. No.33A. Alternatively, however, they claimed the benefit of Sl. No.30(I)(B) which prescribed concessional rate of 12.5% as basic customs duty. For the purpose of considering this claim of the import, samples of the goods were drawn. Samples of the goods covered by the two relevant bills of entry were sent to National Institute of Technology (Karnataka) [NIT-K] for ascertaining Free Fatty Acid (FFA) content. The report of that institute indicated FFA content of 11.69% and 1.26% in respect of the two samples. The importer requested for fresh test of the samples, which request was acceded to and remnant samples were sent to the Customs House. The Customs House reported FFA content of 16.7% and 3.4% in respect of two samples related to the two bills of entry. In the reply to the relevant show-cause notice, the party asked for retest. They also wanted to cross-examine the Chemical Examiner of Customs House, Cochin. The adjudicating authority denied the benefit of the Notification No.21/2002-Cus. [Sl. No.30(I)(B)] to the importer on the basis of the concurrent test results showing FFA content less than 20%. It appears from the records that the show-cause notice had demanded differential duty of Rs.17,83,038/-. From the records, it appears that a corrigendum to the show-cause notice was issued enhancing the quantum of demand to the extent of Rs.20,76,404/-. The party replied to the show-cause notice as well as to the corrigendum. In the result, the entire demand of duty demanded by the department came to be confirmed against the importer by the original authority.
2. Aggrieved by the order-in-original, the party preferred an appeal to the Commissioner (Appeals) and also applied for waiver of pre-deposit. The appellate authority directed them to pre-deposit an amount of Rs.12 lakhs, which they did not deposit. The appeal filed by the assessee therefore came to be dismissed for non-compliance with Section 129E of the Customs Act. The present appeal and stay application are directed against the appellate Commissioners order.
3. The learned counsel for the appellant has invited our attention to certain aspects of the lower appellate proceedings, which we are not inclined to consider at this stage. For the present, we would like to examine whether the appellant, indeed, could make out a prima facie case before the Commissioner (Appeals) for the purpose of full waiver of pre-deposit. The appellant has been seeking the benefit of Notification No.21/2002-Cus. [Sl. No.30(I)(B)] which prescribed a concessional rate for the imported goods subject to FFA content of less than 20%. FFA content was tested by NIT-K, and subsequently, on specific request of the importer, by the Cochin Customs House Laboratory. Both the results were concurrently against the party inasmuch as the FFA content was reported to be less than 20%. That the appellant wanted to cross-examine the Chemical Examiner before the original authority is a matter to be discussed at final hearing stage. Prima facie, the concurrent test results coming from reputed Government agencies have to be relied upon. On this basis, we have not found prima facie case for the appellant against the demand of duty resulting from denial of the benefit of Notification. At this stage, the learned counsel has endeavoured to set up financial hardships as a ground for substantial reduction of the amount for pre-deposit. In this connection, she has referred to profit and loss account as on 31.3.2011, balance sheet as on 31.3.2011, etc. These documents indicate entries relating to depreciation, profit before tax, profit after tax, profit/loss from previous year, etc. On a comparison of such entries as on 31.3.2010 and as on 31.3.2011, we find a marked improvement of the financial position of the company. This apart, the income tax records indicating the latest financial status of the company at least as on 31.3.2012 are not forthcoming. The above records cannot be considered to reflect the latest financial position of the company. If the aforesaid trend of improvement of financial status from 2010 to 2011 has continued for 2012 and 2013, their financial position as on today will be much much better. Nevertheless, we are taking into account the fervent plea made by the learned counsel.
4. In the above view of the matter, we would expect the appellant to pre-deposit an amount of Rs.9,00,000/- (Rupees Nine Lakhs Only) to enable the Commissioner (Appeals) to dispose of their appeal on merits. They shall deposit this amount within seven weeks (this much time specially requested for by the counsel) from today and report compliance to the Commissioner (Appeals), whereupon he shall take up the assessees appeal filed against the order-in-original and dispose of it on merits without insisting on further pre-deposit and in accordance with law. Needless to say that the appellant shall be given a reasonable opportunity of being heard.
5. The appeal stands allowed by way of remand. The stay application also stands disposed of.
(Pronounced and dictated in open Court) (B.S.V. MURTHY) Member (T) (P. G. CHACKO) Member (J) rv 5