STUTI ELECTRONICS LTD AND Vs. CC, JAIPUR

JUDGEMENT

(1.) FOR hearing their appeals, M/s. Stuti Electronics Ltd. are required to pre -deposit the customs duty of Rs.62,08,704/ - and a penalty of Rs.62,08,704/ - total Rs.1,24,17,408/ - and Shri Anil Saxena, Managing Director ils required to pre -deposit a penalty of Rs.10,00,000/ -. The matter relates to the alleged shortages in the stock of capital goods, spares, etc, which had been imported duty free under exemption Notification No.53/97 Cus dated 3.6.97(as amended,), for manufacture and export of colour computer monitors, falling under sub -heading No.8473.20 of the Central Excise Tariff.

(2.) BOTH the stay applications were heard on 9.4.2001 when Shri L.P. Dhir, Advocate appearing for the applicants submitted that the adjudicating authority had not allowed the cross examination of the central excise officers,who had conducted the checks in the factory premises. The applications had made a prayer for such cross examination in their provisional reply to the show cause notice.The employees on whose statements reliance had been placed by the adjudicating authority had been frightened by the Central Excise Officers and were confused.The physical verification was not complete.Shri Anil Saxena, Managing Director was unwell and no time was given for getting the full inventory of the goods made. M/s. Stuti Electronics Ltd. had deposited Rs.1.5. lakhs and the full amount as promised by Shri Anil Saxena could not be deposited due to financial hardship.The unit was facing financial problems and the matter was before the Board for Industrial and Financial Re -construction(BIFR). The ld. Advocate referred to the Delhi High Court's decision in the case of Ripen Kumar Vs. Department of Customs -88 (2000) Delhi Law Times 541 (BB), wherein it was held by the Delhi High Court that in a case of prosecution, the evidence means the examination in chief and the cross examination and that an in -complete statement of prosecution witness in the absence of cross examination would not be created as evidence nor the same could be relied upon.He also referred to the Tribunal's decision in the case of Hindustan Wires Ltd. Vs. Commissioner of Central Excise, Delhi - 2001 (129) ELT 159 (Tribunal) and the Tribunals's decision in the case of Shree Krishan Rolling Mill (Jaipur) Ltd. Vs. Commissioner of Central Excise, Jaipur - 2001 (129) ELT 160 (Tribunal) in support of his contention that when a company was sick, was under BIFR facing acute financial difficulty, un -conditional stay was justified.

(3.) WE have carefully considered the matter .The appellants were a 100% Export Oriented Undertaking (EOU) engaged in the manufacture of coloured computer monitors, classifiable under sub -heading No.8473.20 of the Central Excise Tariff, for export and availed of the benefit of duty free imports of capital goods, raw materials, spares, etc. under Notification No.53/97 Cus dated 3.6.97 (as amended). M/s. Stuti Electronics Ltd. availed of the benefit of the said exemption Notification No.53/97 Cus and imported duty free capital goods, raw materials, spares, etc. The benefit under the aforesaid exemption notification was not un -conditional and was subject to the various conditions as mentioned in that Notification. The duty free imported goods were to be used in the manufacture of goods for exports by the 100% Export Oriented Unit. On 17.5.99 and 15 -8.5.99, when Central Excise Officers visited the factory premises of the appellants, it was found that a number of capital goods, spares, etc. which had been import duty free were not available in the factory premises. Shri Anil Saxena, Managing Director in his statement dated 20.05.99 and 21.5.99 admitted the shortages and undertook to deposit the duty at the earliest.The shortages had been admitted by the employees of the assessee's company.In the show cause notice dated 13.4.2000, the role of Shri Anil Saxena, Managing Director in the alleged clandestine removal of the duty free imported capital goods, spares, etc. without authority had been mentioned in para -14 of the said show cause notice.