TRISUN CHEMICAL INDUSTRIES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner has invoked Article 226 of the Constitution with the prayer to set aside orders dated 30. 08. 2007 and 10. 12. 2007 of the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad ("cestat" for short) and order-in-original dated 30. 03. 2007 of the Commissioner of Customs, Kandla ("the Commissioner" for short ). By the latter order, the Commissioner has, inter alia, confirmed demand for duty amounting to Rs. 201,80,46,133/- under sections 3 (1) and 11-A of the Central Excise Act, 1944 and imposed penalty of the like amount; also confirmed demand for duty amounting to Rs. 1,05,17,210/- under the proviso to section 28 of the Customs Act, 1962, imposed penalty of the like amount and imposed penalties upon several companies and individuals on various other counts. Challenging that order-in-original before CESTAT in appeal, the petitioner has also filed application for stay with prayers not to insist upon pre-deposit of duty, interest and penalty, and such applications are partly allowed by CESTAT by the impugned order dated 30. 08. 2007. Application for modification of that order is dismissed by the order dated 10. 12. 2007. Thus, the main prayer in the present petition is for a direction to CESTAT to hear and decide the petitioner's appeal without insisting upon any pre-deposit, even as it was directed by the order dated 30. 08. 2007 to deposit only 15% of the duty demanded from them within 12 weeks and, subject to pre-deposit of that amount, balance duty demanded and penalties imposed were waived and recovery thereof was stayed. In view of high stakes of revenue involved, the appeals were ordered to be taken up on 28. 11. 2007. Admittedly, even after dismissal on 10. 12. 2007 of the modification application of the petitioner, 15% of the duty demanded were not deposited; and even 10% of the duty amount required to be deposited as condition precedent for the ad-interim relief granted herein were not paid, due to which, no stay or ad-interim relief operates in favour of the petitioner, as clarified by order dated 16. 06. 2008. After the last impugned order dated 10. 12. 2007, the present petition was moved for urgent orders on the last working day before commencement of summer vacation and, therefore, hearing of the petition was adjourned to 16. 06. 2008 after granting interim stay of coercive recovery on condition of depositing within two weeks 10% of the duty amount, which was also not deposited.

(2.) THE main contention on behalf of the petitioner, strenuously canvassed before this court, was that the petitioner was a bona fide exporter of castor oil produced from indigenous raw material on which no duty was payable and, in view of its financial sickness, it was not possible for them to deposit even 15% or 10% of the duty amount for having its appeal heard and decided on merits.

(3.) ACCORDING to the petition, the petitioner had established its unit in Kandla Free Trace Zone ("kftz" for short) without availing any benefit of customs duty in respect of the capital goods and had utilized only indigenously produced raw material for the goods produced for export. It had set up in the year 1995 another unit at Bhachau in the domestic tariff area (DTA) for the same purpose of extraction of oil for export. It had earned net foreign exchange of Rs. 641 crores in the period of last five years without availing any benefit of any kind in setting up the unit or procuring raw material. The export was either by removing oil directly to the port or mostly after storing in tank near jetti notified for loading and unloading of liquid cargo. In short, all the operations for export were under the surveillance of customs authorities and independent surveyors and, during the relevant period, the company had exported goods worth more than Rs. 600 crores out of which goods of the value of Rs. 300 crores were exported from the zone under physical control of the department.