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ROLEX RINGS PVT LTD & 1 Versus UNION OF INDIA & 3

2015 (11) TMI 1464 - GUJARAT HIGH COURT

Waiver of pre-deposit - Confiscation of exported goods - Classification of machined rigs - Classification under Chapter Sub-heading 84829900 or under Drawback tariff item No. 848221 - Held that:- Appellate Tribunal had thought it fit to direct pre-deposit of ₹ 48,03,301/- as against the demand of excess drawback of ₹ 2,71,78,810/-, whereas the Commissioner (Appeals) has thought it fit to direct the petitioners to pre-deposit ₹ 24,00,000/- and ₹ 10,00,000/- in relation to .....

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rits of the order of the Commissioner (Appeals), as pointed out by the learned counsel for the petitioners, the classification issue which is involved in the appeal before the Commissioner (Appeals) stands concluded by an order dated 29.10.2015 of the Appellate Tribunal in favour of the petitioners. Under the circumstances, the petitioners have a prima facie case for waiver of pre-deposit.

When the court has found merit in the case of the petitioners and the matter does not involve a .....

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AL CIVIL APPLICATION NO. 8509 of 2015 - Dated:- 5-11-2015 - MS. HARSHA DEVANI AND MR. A.G.URAIZEE, JJ. FOR THE PETITIONER : MR PARESH V SHETH, ADVOCATE FOR THE RESPONDENTS : MRS VD NANAVATI, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. Rule. Mrs. V. D. Nanavati, learned advocate waives service of notice of rule on behalf of the respondents. 2. Having regard to the controversy involved in the present case which lies in a very narrow compass, the matter is taken up for fin .....

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nst the petitioners holding that the machined rings for bearings manufactured and exported by the first petitioner (hereinafter referred to as the petitioner ) should be classified under Chapter Sub-heading 84829900 of the Schedule to the Customs Tariff Act, 1962; that the machined rings for bearings manufactured and exported by the petitioner should be classified under Drawback tariff item No. 848221 of the Drawback Schedule; that the gear blanks manufactured and exported by the petitioner shou .....

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confirmed the demand and ordered recovery of excess drawback aggregating ₹ 48,03,301/- and imposed penalty of an equal amount on the petitioner under the proviso to section 114(iii) of the Customs Act, 1962. A penalty of ₹ 20,00,000/- also came to be imposed on the Managing Director of the petitioner, that is the second petitioner herein. 5. Being aggrieved, the petitioners carried the matter in appeal before the Commissioner of Customs (Appeals), Ahmedabad, who, by an order dated 01 .....

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that the petitioners, thereafter, moved an application requesting the Commissioner (Appeals) to waive the pre-deposit. By an order dated 16.01.2015, the Commissioner (Appeals) found that the petitioners had not put forth any new or valid reasons which warrant reconsideration of the order dated 01.01.2015. He, accordingly, maintained the stay order and directed the first petitioner to pre-deposit ₹ 24,00,000/- and the second petitioner to pre-deposit ₹ 10,00,000/- towards penalty in r .....

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o adjudicated a show cause notice for the period from 01.01.2011 to 30.09.2012, which came to be challenged before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as the Appellate Tribunal ). Along with the appeal, the petitioners had also filed the stay application for stay of recovery of the duty confirmed and the penalty imposed. The Tribunal, by an order dated 21.07.2011 (Annexure O to the petition), had in relation to the amount of excess availed drawback of .....

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t the demand of ₹ 2,71,78,810/-, thought it fit to direct pre-deposit of only ₹ 40,00,000/-, whereas in a similar case, the Commissioner (Appeals) in relation to duty demand of ₹ 48,03,301/-, had thought it fit to direct pre-deposit of ₹ 34,00,000/-. According to the learned counsel, the Commissioner (Appeals) was not justified in directing payment of such a huge amount of predeposit, when on a similar issue, the Tribunal had thought it fit to direct payment of a much les .....

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g with interest and penalties. It was submitted that having regard to the order passed by the Tribunal on merits, on a similar issue, the order of the Commissioner (Appeals) dismissing the appeals filed by the petitioners on account of non-payment of pre-deposit is required to be quashed and set aside. It was submitted that at the time of issuance of notice, this court had directed the petitioners to deposit ₹ 10,00,000/- with the original authority which can be treated as pre-deposit and .....

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hich is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. It was submitted that the undue hardship is caused by the order passed by the Commissioner (Appeals) directing payment of pre-deposit which is very much disproportionate to the amount of pre-deposit ordered to be paid by the Tribunal in a similar set of facts. 7. Opposing the petition, Mrs. V. D. Nanavati, learned standing c .....

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e Central Government in revision which is not permissible. It was submitted that the Commissioner (Appeals) was in law justified in not entertaining the appeal as the petitioners did not comply with the provisions of pre-deposit under section 129E of the Customs Act. It was accordingly urged that this court may not entertain the petition and that the petitions be dismissed and the petitioners be relegated to avail of the alternative statutory remedy available under the provisions of the Customs .....

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-, whereas, the Commissioner (Appeals) has thought it fit to direct the petitioners to pre-deposit an amount of ₹ 34,00,000/- as against a duty demand of ₹ 48,03,301/-. Thus, there is a considerable disparity in the amount of predeposit as directed by the Appellate Tribunal and as directed by the Commissioner (Appeals). 10. The Supreme Court in Benara Valves Ltd. v. Commissioner of Central Excise (supra) had, in the context of the expression of hardship as envisaged under section 35F .....

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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. It was noted by this Court in S. Vasudeva v. State of Karnataka and Ors. (AIR 1994 SC 923) that under Indian conditions expression "Undue hardship" is normally related to economic hardship. "Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue .....

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1. Examining the facts of the present case in the light of the principles propounded in the above decision, as noticed hereinabove, in relation to an identical issue, the Appellate Tribunal had thought it fit to direct pre-deposit of ₹ 48,03,301/- as against the demand of excess drawback of ₹ 2,71,78,810/-, whereas the Commissioner (Appeals) has thought it fit to direct the petitioners to pre-deposit ₹ 24,00,000/- and ₹ 10,00,000/- in relation to demand of excess drawback .....

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t by the learned counsel for the petitioners, the classification issue which is involved in the appeal before the Commissioner (Appeals) stands concluded by an order dated 29.10.2015 of the Appellate Tribunal in favour of the petitioners. Under the circumstances, the petitioners have a prima facie case for waiver of pre-deposit. 12. By an order dated 16.07.2015, this court had directed the petitioners to deposit ₹ 10,00,000/- with the original authority, that is, the respondent No.4 herein .....

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