UNIFAX SYSTEMS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE substantial question of law urged by the appellant/assessee is whether the majority opinion of the Tribunal (hereinafter referred to as "CESTAT") requiring pre -deposit of 50% duty is justified in the circumstances of the case. The appellant imported fax machine which was declared as goods falling under CT8443 31 00/8443 32 60 which provides for nil rate of duty. The department was of the opinion, upon investigation initiated in the meanwhile, that the goods were classifiable under Heading 8843 39 70 which attracted duty at the rate of 7.8%. Show cause notice was issued; the extended period of limitation of 5 years under Section 28 of the Customs Act was also invoked. The show cause notice was confirmed in the order -in -original dated 26 -3 -2012. Feeling aggrieved the appellant approached the CESTAT and during the pendency of this appeal sought suspension of requirement of pre -deposit of the tax demand which was to the tune of Rs. 42 lakhs. By plurality of opinion the majority of CESTAT held that 50% of this demand shall be deposited as a condition to hearing the appeal. Apart from the fact that one member prima facie agreed with the classification proposed by it, which itself was sufficient to abate the requirement of the pre -deposit, the department itself appeared to be unfair as it is urged that different Commissionerates, had taken conflicting opinions regarding appropriate classification of the very same goods. Counsel for the Revenue urged that this Court should not interfere with the order of the CESTAT which is an interim one and has balanced the interests of the authorities. It was pointed out that the appellant has been given substantial relief to the extent of 50% waiver of pre -deposit.

(2.) THIS Court has considered the submissions. It is evident from the materials on record that there appears to be a conflict within the department itself as to the proper classification of goods i.e. whether they are to be cleared under Tariff Heading 8443 32 70 or 8443 32 60. This coupled with the fact that one Member of the CESTAT was of the opinion that the extended period of limitation was not properly invoked, is in the opinion of this Court sufficient for the Tribunal to have made an order granting substantial relief. Having regard to these facts this Court is of the opinion that the impugned order to the extent it requires deposit of 50% of the amount should be modified. Instead the petitioner should be permitted to deposit 20% of the amount as a pre -condition subject to which its appeal may be heard. The appellant is granted 4 weeks time to make the deposit. The appeal is partly allowed in the above terms. Order dasti.