2014 (8) TMI 736 - HC - Customs

Waiver of pre deposit - Misdeclaration of goods - export of Muriate of Potash (MOP) of fertilizer grade as Oil Well Chemical (drilling chemical additive) - Smuggling of goods in violation of the relevant notification of the DGFT - appellant failed to establish that it had procured the goods from a seller - Held that - Tribunal has noted prima facie that the goods which were attempted to be exported were MOP as demonstrated by the report of two laboratories and other material facts and evidence on record - The order of the Ahmedabad Bench of the Tribunal virtually contains no reason at all. On the contrary in the impugned order the Tribunal has furnished cogent reasons and also dealt with the issue of financial hardship. On the balance the Tribunal has directed a deposit of Rs. 20.00 lacs. The impugned order of the Tribunal does not suffer from any perversity nor does the appeal raise any substantial question of law. However the time for depositing Rs. 20.00 lacs granted by the Tribunal is extended by a further period of four weeks.

Summary

Issues:
Challenge to CESTAT order on waiver of pre-deposit requirement.

Analysis:
The appellant challenged an order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding the waiver of a pre-deposit requirement. The Tribunal directed the appellant to deposit Rs. 20.00 lacs within four weeks, against a penalty of Rs. 50.00 lacs, related to the mis-declaration of a consignment as Oil Well Chemical instead of Muriate of Potash (MOP) fertilizer grade. The goods were seized for violation of DGFT notification.

The Tribunal found prima facie evidence that the goods were indeed MOP, supported by laboratory reports and other evidence. The appellant failed to prove procurement from a legitimate seller. The Tribunal, considering all circumstances, ordered a pre-deposit of Rs. 20.00 lacs. The appellant cited a case from the Ahmedabad Bench where a lower pre-deposit was accepted, but the High Court found that the Ahmedabad order lacked reasoning compared to the detailed analysis in the impugned order.

The High Court upheld the Tribunal's decision, finding no perversity in the order or substantial legal questions raised in the appeal. The Court extended the time for depositing Rs. 20.00 lacs by an additional four weeks. The appeal was dismissed, and no costs were awarded.