CONSUMERS PLASTICS PVT. LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) After hearing both sides for some time on the application for waiver of pre -deposit of customs duty of Rs. 8,75,951/ - and penalty of Rs. 8,76,000/ - we find that it was possible to decide the appeal itself at this stage and hence proceed to do so with the consent of both sides after waiving pre -deposit.

(2.) The Commissioner of Customs has confirmed the above demand and imposed penalty as above on the ground that the appellants herein who are transferees of VBAL licences were not entitled to duty free clearance as the merchant -exporters/original licence holder had availed input stage credit which was contrary to the conditions of Notification 203/92 -Cus., dated 19 -5 -1992.

(3.) On hearing both sides we find that neither does the show cause notice disclose the basis for the above allegation nor does the order rely upon any evidence to establish availment of input stage credit by the original licence holder, except to state that since the final product was excisable, the credit may have been availed of. Therefore the demand confirmation and penalty cannot be sustained on the above basis. We therefore set aside the impugned order and allow the appeal.