EASTERN GRANITES LTD. Vs. COMMISSIONER OF CUSTOMS, GUNTUR

JUDGEMENT

(1.) THESE stay applications are taken up for consideration which arises from Order -in -Original No. 9/2003. The Revenue initiated proceedings against the appellant for not fulfilling the export obligation in terms of the double bond executed by them and in terms of Notification No. 13/81 -Cus., dated 9 -2 -1981. The total duty demand confirmed is Rs. 6,95,52,486/ - (Rs. Six crores ninety -five lakhs fifty -two thousand four hundred eighty -six only). There is a further demand of Rs. 13,18,276/ - (Rs. Thirteen lakhs eighteen thousand two hundred seventy -six only) besides confirmation of interest. The imported capital goods have been confiscated and redemption fine of Rs. 6,95,000/ - (Rs. Six lakhs ninety -five thousand only) has been imposed. There is a penalty of Rs. 6,00,000/ - (Rs. Six lakhs only) on the company and a penalty of Rs. 1.75 crores on the Managing Director.

(2.) LD . Consultant submits that appellants have applied to the Development Commissioner seeking permission to continue to be under EOU scheme. On being pointed out by ld. SDR, the Development Commissioner has already adjudicated the matter and has imposed a penalty of Rs. 20,000/ - and only thereafter the proceedings have commenced; ld. Advocate submits that in terms of Board Circular, the Department had to wait till such time as the Development Commissioner determines all the points. Ld. Consultant submits that the Department has taken action prematurely and the proceedings are not sustainable. He relies on the judgment rendered in the case of T. Gayathri Reddy v. CC, Guntur [2003 (159) E.L.T. 1034] wherein the show cause notice had been issued and proceedings commenced even before the Development Commissioner had arrived at a definite conclusion. Ld. SDR submits that this judgment is not applicable as in the present case the Development Commissioner has already decided the case. Ld. Counsel relied on similar judgment rendered by the Tribunal in the case of T.V. Raja Reddy v. C.C.E. [2001 (138) E.L.T. 793] which followed the above noted judgment. Further reliance was placed on Kuntal Granites (P) Ltd. v. C.C.E., Belgaum [2001 (132) E.L.T. 214] wherein also the adjudication had commenced before the Development Commissioner took up the issue for consideration. The Circulars and the citations have been distinguished by the ld. SDR and pointed out the same is not applicable to the facts as in those cases the proceedings had been concluded even before the Development Commissioner had considered the matter in terms of the Board Circular. On our prima facie consideration, we notice that in the present case the matter had already been adjudicated by the Development Commissioner and the appellants have been penalised by penalty of Rs. 20,000/ -.

(3.) ON a careful consideration, we notice from the order passed by the ld. Commissioner that the appellant did not dispute the fact about their default in so far as the export obligation is concerned. The only point raised by the Consultant is that the Development Commissioner should conclude his proceedings before the Revenue can issue show cause notice. He also refers to the Board Circular. Ld. SDR has rightly pointed out that the confirmation of demands have been made only after the Development Commissioner was satisfied about the appellants not having fulfilled the export obligation. The Development Commissioner has imposed penalty also. Therefore, we reject the argument raised by ld. Consultant that there is infirmity in the proceedings. We do not find any infirmity in the proceedings. Admittedly, export obligations have not been fulfilled. Therefore, the demand raised by confirming duty is justified. Therefore, the appellants are required to pre -deposit duty amount of Rs. 6,95,52,486/ - (Rs. Six crores ninety -five lakhs fifty -two thousand four hundred eighty -six only) and also further duty amount of Rs. 13,18,276/ - (Rs. Thirteen lakhs eighteen thousand two hundred seventy -six only) should be pre -deposited within a period of four months from today. On such pre -deposit being made, the penalty on the appellant -company and the Managing Director stands waived and recovery stayed. It is made clear that if the appellants do not deposit the amounts, then the appeals will be liable for dismissal under Section 129E of the Act. Call on to report compliance on 3rd September 2004.