JHOONJHUNWALA VANASPATI LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) EXAMINED the records and heard both sides.

(2.) THE applicants, manufacturers of Vanaspati (Sub -heading 1504 of the Central Excise Tariff Schedule), imported a consignment of crude palm oil (raw material) and cleared the same under few Bills of Entry at concessional rate of duty under a Customs notification which prescribed end -use of the goods. The total quantity of crude palm oil covered by the Bills of Entry was 6200.735 MTs, out of which a quantity of 6157.560 MTs only was received in the applicant's factory. The differential quantity (43.175 MTs) was claimed to have been lost in transit, by the party, who accordingly filed an application for remission of duty with the Assistant Commissioner concerned. Meanwhile, the department took the stand that the quantity of 43.175 MTs of crude palm oil was not put to the intended use and hence the benefit of concessional duty was not available to such quantity. On this basis, the department, by show cause notice, demanded duty amounting to Rs. 1,75,627/ - and proposed to impose penalty on the party under Section 117 of the Customs Act. The demand of duty and the proposal for imposing penalty were resisted. The adjudicating authority confirmed the demand of duty under Rule 9 of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 read with Section 28 of the Customs Act and also imposed a penalty of Rs. 30,000/ - on the party under Section 117 of the Act. The appeal preferred by the aggrieved party against the decision of the original authority did not succeed before the Commissioner (Appeals). Hence, the appeal and the present application before the Tribunal.

(3.) LD . Consultant for the applicants submits that the remission application is still pending and hence the demand of duty is unjustifiable. The differential quantity of 43.175 MTs of crude palm oil was lost in transit from the Customs barrier to the factory and hence not available for the intended use under the notification. Hence, the department's allegation that the end -use condition under the notifications had been violated with intent to evade payment of duty cannot be sustained. Ld. Consultant further submits that there is no reason whatsoever to impose any penalty on the applicants under Section 117 of the Customs Act. Further, he questions the applicability of Board's Circular No. 46/96 -Cus., dated 30 -8 -96 to the facts of this case and also claims support from the decisions of the Tribunal in Century Textiles and Industries Ltd. v. CC, Mumbai [1998 (100) E.L.T. 466] and Madras Petrochem Ltd. v. CC, Mumbai [1999 (112) E.L.T. 336]. Ld. Consultant submits that the applicants have a strong prima fade case on merits warranting waiver of pre -deposit and stay of recovery in respect of the duty and penalty amounts. He also points out that an amount of Rs. 50,000/ - is already lying in deposit with the lower appellate authority.