TRENDY MOODS Vs. CUSTOMS EXCISE AND GOLD CONTROL APPELLATE TRIBUNAL NOW KNOWN AS CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL

JUDGEMENT

(1.) APPELLANT is a merchant, exporting various goods, apart from importing raw-materials. He was granted an Advance Licence on 01.04.1992 under Duty Exemption Scheme. As per the said Scheme, exporters are allowed to import inputs i.e., raw-materials, components, consumables, packaging materials and mandatory spares required for the manufacture of a given finished product known as 'resultant product', without payment of import duty on such inputs, subject to the condition that a specified quantity of the resultant product should be exported within a specific time limit and the foreign exchange against such exports should be realised. The licence in question permitted the import of 81 MTs. of Cassia, subject to the condition that 1000 Kgs. of Cassia Oil should be exported. The appellant effected imports of 80.534 MTs. of Cassia against the Advance Licence. Duty free imports were allowed in terms of Customs Notification No.159/90.

(2.) AS a result of certain allegations made by the Directorate of Revenue Intelligence, a show cause notice, dated 07.09.1995, was issued to the appellant, alleging certain violations, and demanding duty of Rs.38,91,449/-, by disallowing the duty exemption availed, for which the appellant sent a reply, pursuant to which, the second respondent, namely, Commissioner of Customs, by his Order-in-Original No.13 of 1999, dated 15.03.1999, directed the appellant to pay Rs.26,54,175/-, towards customs duty, in addition to a penalty of Rs.2.50 lakhs on the firm and a personal penalty of Rs.25,000/- on the Power of Attorney Holder of the appellant. The said order was challenged by the appellant in Appeal Nos.C/268 and 269 of 1999 before the first respondent, namely, Customs, Excise and Service Tax Appellate Tribunal (in short, "the Appellate Tribunal") along with Stay Application Nos.151 and 152 of 1999. The Appellate Tribunal, by its Stay Order Nos.89 and 90 of 2000, dated 01.02.2000, directed the appellant to deposit a sum of Rs.13.00 lakhs within two months, observing that if such amount was deposited and compliance reported, the balance amount of duty, penalty, personal penalty etc., stood waived and recovery thereof stayed during the pendency of the appeals. It was also made clear that if the amount was not deposited within the stipulated time, the appeals would be liable for dismissal.

(3.) CONVERSELY, the learned Senior Central Government Standing Counsel, appearing for the respondents, would submit that the EXIM Policy does not provide for stocking of the duty free imports and later on selling the same in the local market either before or after completion of export obligation the duty free imports in this case can in no way be considered as 'replenishment materials', as the appellant is not a manufacturer and no attempt had been made to replenish the raw-materials used in the manufacture of export products, but the same had only been kept as stock hence, by no stretch of imagination, these duty exempt material, kept as stock, can be termed as replenished material and disposed of as per Customs Notification No.159/90 and that the appellant is having sufficient means to pay the pre-deposit. In support of his contention, the learned Senior Central Government Standing Counsel has relied upon the following decisions : (i) Benara Valves Ltd. and Another v. Commissioner of Central Excise and Another, 2006 (13) Supreme Court Cases 347 :