Customs, Excise and Gold Tribunal - Delhi
Navodhya Fabrics Ltd. vs Commissioner Of Customs on 11 December, 2006
Equivalent citations: 2006(113)ECC609, 2006ECR609(TRI.-DELHI), 2007(208)ELT241(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. Heard both the sides at length and perused the records.
2. The appellant M/s. Navodhya Fabrics Ltd., Ludhiana imported polyester filament yarn consignments during the period November, 2002 to May, 2003. The imports were in terms of DEEC licence, and were duty free. The obligation cast on the appellant was to use the same filament yarn in the manufacture of polyester fabrics and to export the fabrics. The appellant had executed bonds with the Customs for fulfilment of that obligation.
3. The appellant claimed that the export obligation remained satisfied in the light of certain 'deemed' exports. These were supplies made to M/s. Spectrum Silk Mills, Surat, which was a 100% export oriented unit and that the fabrics were used by that unit for export production. The supplies were made to M/s. Spectrum Silk Mills during the period January, 2003 to March, 2003.
4. The aforesaid supplies to M/s. Spectrum Silk Mills were stated to be made under 23 truck transport GRs. Customs authorities at Ludhiana undertook investigation into the said supplies. It was found that while the GRs were of three transport companies at Nasik, Calcutta and Ahmedabad, none of these transport company had any office in Ludhiana. One of the transport companies namely, Jay Bharat Roadways, did not exist in Nasik. The other two transporter companies stated that they had not carried out any transport of the consignments in question and had not received any payment for the said transporters. The authorities also sent the GRs in question for expert opinion to examiner of questioned documents. That authority expressed the opinion that, "The writings and signatures stamped and marked Q1, Q2 and Q3 were all written by one and the same person." During the early stage of investigation, the buyer stated that it had not received any of the consignments.
5. Based on these evidence, proceedings were started against the appellant and remain concluded under the impugned order. The adjudicating authority has taken a view that the appellant had not satisfied its export obligation since the said 'deemed' export supplies to a 100% export oriented unit did not take place and the documents and other evidences produced were the result of forgery/falsification.
6. During the hearing today, the learned Senior Counsel for the appellant has canvassed the waiver of requirement for pre-deposit on the ground that the manufacturer is in financial difficulties. It is also pointed out that out of the duty demand of about Rs. 61 lakhs, the demand amounting to Rs. 6 lakhs cannot arise at all since no anti-dumping duty was attracted on the imported goods and that Rs. 10 lakhs remain already deposited. It is also pointed out that the appellant has a case on merits inasmuch as the proprietor of the export oriented unit at Surat has filed an affidavit confirming receipt of the consignments. It is also pointed out that DGFT has accepted the deemed export supplies made by the appellant and discharged the bond executed by it. It is the contention that the Customs authorities, do not have any jurisdiction for duty demand once the export obligation remained discharged and accepted by the DGFT Ground of financial hardship has also been adduced in support of the stay application.
7. The contention of the learned Senior Departmental Representative is that it is well settled that in regard to DEEC imports, Customs authorities had jurisdiction to investigate inasmuch as duty free imports had been allowed under an export obligation and the failure to use the material for export production attracted the provisions of Section 111(O). Reliance in this connection is placed on the judgment of Hon'ble Supreme Court in the case of Sheshank Sea Foods Pvt. Ltd. v. Union of India .
8. A perusal of the evidence, prima facie, shows that the appellants claim of supplies to the export oriented unit at Surat is not acceptable. As already noted, supplies were under 23 GRs. These GRs are in the name of three transport companies; but they have been found to be prepared by the same person upon examination by the Examiner of Questioned Documents. Further, one of the transport companies does not exist and the other transport companies have denied having made any transport or receipt of any payments for the same.
9. In the above circumstances, we are of the clear opinion that there is no justification for waiver of requirement for pre-deposit of duty involved. The appellant, M/s. Navodhya Fabrics Ltd. are therefore, directed to make a pre-deposit of a further amount of Rs. 40,00,000/- (Rupees Forty lakhs only) within a period of 8 weeks from today.
10. We may make it clear that we have kept in mind the submissions regarding financial hardship. We find it difficult to accept the same mainly because these transactions are apparently outside the books of accounts of the applicant and therefore, plea about financial hardship, made basing entirely on the books of accounts, would not be tenable. That apart, the appellant has considerable assets as seen from its balance sheet.
11. The appellants are directed to report compliance on 15-2-2007. Upon the said deposit, the requirement of deposit of remaining duty and penalties shall remain waived. In the event of failure to make the pre-deposit, the appeals shall stand dismissed.
12. All applications are disposed of in the above terms.
(Pronounced and dictated in the open Court)