MICROLAND LIMITED Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) FOR the purpose of hearing the appeal, the appellant is required to pre -deposit of Rs. 36,04,197/ - and penalty of Rs. 80,000/ -. The appellant had warehoused the goods. The warehousing period expired on 31 -3 -99. The appellant had applied for extension of the warehousing period. That was also granted for 4 years. Thereafter there was no extension of warehousing period. Hence the proceedings were initiated for recovery of duty amounts in the light of Apex Court judgment rendered in the case of Kesoram Rayon [1996 (86) E.L.T. 464 (S.C.)]. The appellants took the stand that their request for allowing the goods for re -export is still pending and during its pendency the order confirming demands cannot be passed. However, the Commissioner in the impugned order did not agree with their stand. Learned Counsel points out to the letter issued by the Superintendent on behalf of Commissioner of Customs directing them to pre -deposit Rs. 85,000/ - as penalty for considering their request for re -export of the warehoused goods. They complied with the terms of the direction given by the superintendent by depositing the amount of Rs. 85,000/ - which is arrived at by Rs. 5,000/ - per bond in respect of 17 bonds covering the impugned show cause notices. It is the submission of learned Counsel that when the department itself has taken a stand to consider their prayer for re -export subject to their depositing Rs. 85,000/ - as penalty under Section 117 of the Customs Act, they ought not to proceed for recovery of the duty amount and also should not proceed to encash the BGs as they are attempting to do it today itself. Therefore the learned Counsel submits that stay be granted and a direction be given to the revenue not to enforce the BG. He submits that the BG was given in a different context and for a different unit it cannot be encashed towards its dues. He also relied on the judgment of the Tribunal rendered in the case of Pradeep Ulal, 2001 (133) E.L.T. 428 (Tri. Bang.) and that of Phoenix International Ltd. v. CC, Chennai [2004 (165) E.L.T. 527 (T) = 2004 (62) RLT 181 (CESTAT -Che.)] wherein the Tribunal has held that when a decision on an application for extension of warehousing period is pending, then the demand should not be confirmed. He submits that the same proposition applies even in a case where application for permission to re -export is pending. Learned DR opposed the prayer and submits that once the warehousing period is expired then the department is entitled to recover the amounts. He relied on the Supreme Court judgments referred to in the impugned order. He submits that Revenues interest is required to be safeguarded.

(2.) ON a careful consideration, we find sufficient force in the submission made by learned Counsel in the matter. The department had issued a letter dated 12 -10 -2000 to the appellant to deposit Rs. 85,000/ - under Section 117 of the Customs Act as penalty towards 17 bonds covered in the impugned show cause notices. Subject to this deposit, their prayer for re -export was to be considered. The appellants have complied with the direction of the Superintendent in depositing Rs. 85,000/ -, therefore it was for the department to have taken a decision on the application for re -export of the goods. In the light of the cited judgments, the department is restrained from recovering the amounts till a decision is taken by them with regard to the request for re -export of the goods. In the circumstances appellants have made out a strong case in their favour. The stay application is allowed granting wavier of pre -deposit and staying its recovery. The revenue should not enforce the BG as threatened by them. As the revenues implication is more, the prayer made by both sides to take up the matter out of turn is considered. Appeal to come up for hearing on 4 -1 -2005. In the meanwhile DR should obtain para -wise comments in the matter. A copy of the stay order be made available to both sides expeditiously within two days. DR may inform the Department not to enforce BG. Ordered accordingly.