Orient Industries Vs. Commissioner of Customs

Orient Industries vs Commissioner of Customs

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Aug 04, 1999

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Citation: sooperkanoon.com/16387
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: J T J.H., G Srinivasan
Decided On: Aug 04, 1999
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Orient Industries

Respondent

Commissioner of Customs

Legal References

Reported In: (2000)(67)ECC476

Excerpt

.....at a much later date, that is on 30.5.97, show cause notice was sent to the four importers and also to the present appellant. the allegation was made that while manufacturing the export product modvat credit had been availed of by the manufacturer and therefore the duty free import could not be claimed in terms of the exemption under notification no. 203/92-cus. the show cause notice alleged that the importers were liable to pay the duty on the consignments imported duty free and also that importers as well as the present applicants were liable to penalty. the commissioner in the impugned order was confirmed the demand for duty but did not penalise the importers. he imposed a penalty of rs. 12.00 lakhs on the present applicants. this application is for stay and waiver of this amount.2. shri l.p. asthana made three arguments. the first ground was that the applicant had sought a short adjournment vide letter dt. 14.1.98 addressed to the commissioner. however, this was not granted and the commissioner passed the impugned order on 29.1.98. it is shri asthana's claim that in doing so, the commissioner denied due opportunity to his clients. the second ground is that the applicants had secured the clearance documents of the exported goods. the documents in the form of g.p.i, show that these goods did not suffer any duty of excise at the material time. he submits that if the goods were not dutiable, then the question of modvat having been taken by the manufacture thereupon would not arise. therefore the basis for the issue the show cause notice itself was in doubt. the third claim is that the applicants firm is a sole proprietory concern. the sole proprietor is in financial difficulties and any order directing to make any deposit would cause undue financial hardship.3. during the course of arguments shri asthana also submitted that at the material time when the imports were made, the department itself was in doubt as to the negative value of the modvat having.....

Full Judgment

The applicants applied for grant of advance licence on 22.3.93. On 8.3.93 they exported HDPE woven fabrics. On the ground that the export obligation stood discharged, the licence when received was permitted to be transferred by the licensing authorities. This licence was accordingly transferred to four other persons who imported goods free of duty in the nature of replenishment. At a much later date, that is on 30.5.97, show cause notice was sent to the four importers and also to the present appellant. The allegation was made that while manufacturing the export product modvat credit had been availed of by the manufacturer and therefore the duty free import could not be claimed in terms of the exemption under Notification No. 203/92-Cus. The show cause notice alleged that the importers were liable to pay the duty on the consignments imported duty free and also that importers as well as the present applicants were liable to penalty. The Commissioner in the impugned order was confirmed the demand for duty but did not penalise the importers. He imposed a penalty of Rs. 12.00 lakhs on the present applicants. This application is for stay and waiver of this amount.

2. Shri L.P. Asthana made three arguments. The first ground was that the applicant had sought a short adjournment vide letter dt. 14.1.98 addressed to the Commissioner. However, this was not granted and the Commissioner passed the impugned order on 29.1.98. It is Shri Asthana's claim that in doing so, the Commissioner denied due opportunity to his clients. The second ground is that the applicants had secured the clearance documents of the exported goods. The documents in the form of G.P.I, show that these goods did not suffer any duty of excise at the material time. He submits that if the goods were not dutiable, then the question of modvat having been taken by the manufacture thereupon would not arise. Therefore the basis for the issue the show cause notice itself was in doubt. The third claim is that the applicants firm is a sole proprietory concern. The sole proprietor is in financial difficulties and any order directing to make any deposit would cause undue financial hardship.

3. During the course of arguments Shri Asthana also submitted that at the material time when the imports were made, the department itself was in doubt as to the negative value of the modvat having been taken in the availability of the benefit of the cited notification.

4. Shri V.K. Suman on the other hand supported the Commissioner's finding.

5. We have considered the submissions made. We have also seen the gate passes under which the export production was cleared, which do not indicate payment of excise duty. We have seen the correspondence side which the applicants had asked for a short adjournment for hearing of the case. We find that the Commissioner has not made any mention thereof in his order. We have also seen the supporting documents to the argument that the financial status of the applicant is unsound. We are more impressed by the argument that in the absence of any duty on the final product, the availment of modvat did not arise. We find that a strong prima facie case has been made by the applicants. We therefore grant unconditional stay and waiver of the penalty imposed upon the applicant.

6. The impugned order is common to 5 persons. Registry should verify whether any of the other 4 persons have filed appeals, so that their applications could be taken together for disposal.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Orient Industries vs Commissioner of Customs Same Subject Service Tax Same Judge J T J.H., G Srinivasan