9911796707
TMI Blog2014 (7) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 together with penalty under Section 114 (A) of the Customs Act. 4. It is the case of the appellant that the appellant unit is situated in the Special Economic Zone, part of the Export Processing Zone. The appellant company is engaged in the business of contract research on behalf of Pharmaceutical companies. During the period in question, the department, on verification, found that the appellant unit had cleared goods to the Domestic Tariff Area (for brevity, the DTA ) and those clearances were done without following the procedure laid down under Rule 48 of the Special Economic Zone Rules, 2006, and in violation of Section 30 of the Special Economic Zone Act. A show cause notice in terms of Section 28 of the Customs Act was issued and the matter was adjudicated and a demand for duty was ordered together with penalty. An appeal was filed challenging the order of the Deputy Commissioner dated 23.6.06. The Commissioner (Appeals), vide his order dated 13.9.06, set aside the order of the Deputy Commissioner on the ground of violation of principles of natural justice and remanded the matter back for de novo consideration. The Deputy Commissioner, on remand, took up the matter for reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments indicate a loss of Rs. 25 Lakhs. However, these documents also indicate considerable cash flow to the tune of Rs. 3.8 Crores for the year ending 31st March, 2011. 6. Nevertheless, for the ends of justice, we are considering the plea of hardships also in the context of determining the amount to be predeposited by the appellant. 7. We direct the appellant to predeposit an amount of Rs. 20,00,000/- (Rupees Twenty Lakhs only) towards total demand of duty of over Rs. 50 lakhs within six weeks and report compliance to the DR/AR on 30.1.2013. DR/AR to report to the Bench on 6.2.2013. Subject to the due compliance, there will be waiver and stay in respect of the penalties imposed on the appellant and the balance amount of duty. Application Nos.C/MISC/367/09 & C/MISC/369/09 will be listed along with appeals for hearing. As against the above order passed by the Tribunal, writ petition was filed and the same was dismissed with liberty to file appeal by an order passed by a Division Bench of this Court. Accordingly, this appeal has been preferred challenging the above order of the Tribunal ordering pre-deposit. 6. To canvass the plea that no duty is payable as claimed by the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual aspect is concerned, CEGAT was right in holding that Drawings, Designs and Plans imported by the assessee were covered by Tariff Heading 49.01 and were also entitled to exemption under notifications No. 107/93- Cus and 38/94-Cus. Alternatively, it was submitted that if this Court is of the view that CEGAT has not entered into the said question in view of the Larger Bench decision, the matter may be remitted to CEGAT directing it to consider the case afresh by applying correct test and to take an appropriate decision. 52. The learned counsel for the Revenue submitted that Elecon Engineers Ltd. and Scientific Engineering Housing Ltd. were rendered in different context. The basic issue was whether books were covered by the entry plant under the Income Tax Act. Those decisions, therefore, have no relevance to the issue in question since the entries are Supreme Today With All High Courts Page 18 of 20 different. It was also submitted that since the article in question was to be used by the assessee and was prepared according to his requirement, it had no utility to others. Hence, it cannot be said to be a book in general sense. It was argued that this Court has considered the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratio laid down in Wood Craft Products Ltd. was followed and reiterated in Collector of Central Excise, Hyderabad v. Backelite Hylam Ltd., (1997) 10 SCC 350 : (1997) 91 ELT 13 (SC) and in the Collector of Customs, Bombay v. Business Forms Ltd. Thr. O.L. (2002) 142 ELT 18 (SC). Hence, even that aspect has to be considered and kept in mind while deciding as to whether Drawings, Designs and Plans could or could not besaid to be printed book covered by Chapter Heading 49.01, 49.06 or sub-heading 4911.99? 57. There is still one more aspect which is relevant. It cannot be disputed and is not disputed before us and is also concluded by a decision of a three-Judge Bench in Associated Cement Co. Ltd. that the basic heading is 49.01. It deals with Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets . 49.11 covers Other printed matter, including printed pictures and photographs . Thus, specific or basic Supreme Today With All High Courts Page 19 of 20 heading is 49.01 and residual entry is 49.11. Priority, therefore, has to be given to the main entry and not the residual entry. According to the Company, the case is covered by the main entry under 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prestorp Electronics Ltd.'s case (supra), was not considered by the Tribunal for deciding the prima facie case. The Commissioner (Appeals), in the earlier order, has clearly held that the main issue, which has to be considered is the question of dutiability of the goods, which has been cleared to DTA in the light of the decision of the Supreme Court while considering the issue of waiver of pre-deposit. That issue is still the primary issue for consideration by the Tribunal. We have also noticed that if the goods are not liable to duty in view of the exemption and in the light of the decision of the Supreme Court, the appellant necessarily will have to be given the benefit of being heard without the condition of pre-deposit of duty and also in view of the financial hardship, which is clearly established in the balance sheet showing a loss of Rs. 25 Lakhs despite there being a considerable cash flow to the extent of Rs. 3.80 Crores for the year ending 31.3.2011. It is one thing to say that there is a financial inflow, but that will be required for the purpose of running the business. The appellant cannot be forced to make substantial payment, which will jeopardize the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of the Revenue: Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing. 11. Two significant expressions used in the provisions are undue hardship to such person and safeguard the interests of the Revenue . Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interests of the Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
