1. This appeal has been filed by the Commissioner of Central Excise, Rajkot against the order dated 29.5.89 passed by the Commissioner of Central Excise (Appeals) Mumbai. The brief facts are that the respondents purchased a ship for breaking and applied for permission under Section 52(b) of the Customs Act for lightening the ship which was granted to the appellant on 3.6.87. Since the Customs did not agree to the calculation of the duty on existing LDT of the said ship at the time of the filing and less 30% depreciation, the respondents filed Writ Petition in the Gujarat High Court and the High Court passed an interim order directing respondents to pay basic Customs duty on CVD as per Actual LDT and as per the direction of the High Court respondents paid duty on 4.9.89 and deposited the disputed amount of Rs. 57,78,930 with the Registrar of the High Court they took credit of CVD of Rs. 15,06,647. They effected clearance during January 1988 of the generated scrap and utilised the credit out of the amount of Rs. 15,06,647. Show Cause Notice was issued as to why duty at the appropriate rate on the clearance of the scrap utilising the deposited amount should not be recovered from the respondents. This was resisted by the respondents.
Assistant Commissioner confirmed the demand and imposed penalty of Rs. 5,000 holding that the High Court had not directed that the amount deposited can be utilised by the respondents towards payment of Central Excise duty. The Assistant Commissioner's order was challenged in appeal. The Commissioner (Appeals) disposed of the appeal by holding that if the matter is decided in favour of the Department, the amount deposited in the High Court will be credited to the Department and that if it is decided in favour of the respondent it would be paid back to them. In view of this position the Commissioner (Appeals) held that the respondents could have been granted provisional credit of duty to be finalised on final decision of the case. This decision of the Commissioner (Appeals) is now being challenged.
2. We have heard Shri S.V. Singh the Ld. JDR and Shri A.D. Maru the Ld.
Counsel for the respondents. We find that certain developments have subsequently taken place in this case. By an order dated 29.10.94 the Gujarat High Court after considering a decision in appeal by the Collector (Appeals) dated 31.7.92, rejecting the respondents appeal and directing them to immediately to pay the differential duty of Rs.15,73,930 deposited in the High Court, it has been ordered by the High Court that the Registrar of the Court, be directed to transfer that amount of Rs. 15,73,930 deposited by the respondents by cheque in the name of Collector of Customs, Rajkot. The High Court has further ordered that the receipt of the money by the Collector of Customs, Rajkot would be subject to the result and direction in appeal if any filed by the Respondents. Another development is that there was an appeal filed by the Department against another order in appeal dated 7.5.90 passed by the Commissioner of Customs (Appeals), Mumbai, in which the Commissioner has dismissed the review application by the Department seeking to enhance the penalty of Rs. 5,000 imposed by the Assistant Commissioner on the Respondents. The Commissioner dismissed the appeal before him on the ground that he had allowed the appeal filed by the respondents against the same order of the Assistant Commissioner and that he would unable to take a different view. This order of the Commissioner (Appeals) has been challenged by the Department before the Tribunal, and the Tribunal in its Order No.951/97-WZB dated 18.2.97 has allowed the Department's appeal and remanded the matter to Commissioner (Appeals) for deciding the appeal according to law. Therefore, the matter as regards the penalty on the respondents stands remanded to the Commissioner (Appeals). In this context yet another submission was made before us that the issue regarding the deposit of the balance amount whether the respondents will be eligible for 30% reduction on account of LDT is presently before the Supreme Court and that the Supreme Court has on a stay application by the Department stayed the Tribunal order in favour of the Respondents. In these circumstances narrated above, we are of the view that it will be appropriate to accede to the prayer in the present appeal before the Tribunal by the Department to set aside the impugned order and to remand the matter to the Commissioner (Appeals) for deciding the issue afresh alongwith the Department's appeal which stand already remanded to that authority. Therefore, we allow the Department's appeal by way of remand in the above terms.