Kausalya Impex Vs. Commissioner of Customs - Court Judgment

Excerpt:

.....hsn explanatory note and the opinion of clri are sufficient to hold that the imported items cannot be used as 'insole/midsole'. ld. counsel submits that no samples were drawn and the report obtained cannot be relied on.5. on a careful consideration, after hearing both sides, prima facie, we notice that report of clri and hsn explanatory note are not in favour of the appellants. however, taking into overall facts and circumstances including the plea financial hardship into account, we direct the appellants to pre-deposit a sum of rs. 1 lakh within a period of 2 months. on such pre-deposit of rs. 1 lakh the balance of amount of duty and penalty waived and recovery stayed till the disposal of the appeal. if the amount of rs. 1 lakh is not pre-deposited within the stipulated period, then the appeal shall be liable for dismissal in terms section 129 e of the customs act, 1962. to come up for reporting compliance on 18.2.2004.

Judgment:

1. For the purpose of hearing this appeal the appellants are required to pre-deposit duty amount of Rs. 6,32,699 and penalty of Rs. 6 lakhs.

2. The appellants had imported "Flock Fabric and Fur Cloth". The department took an opinion from Central Leather Research Institute with regard to the use of the item. But the appellants' claim to be "Insole/Midsole" in terms of the Notification No. 16/2000-Cus dt.

1.3.2000. The CLRI confirmed by their opinion dt. 27.11.2000 that the items cannot be used for insole/midsole. The Revenue has also proceeded on the HSN explanatory note wherein it is laid down that the items cannot be used for feather industry.

3. Appearing on behalf of the appellants, Ld. Counsel submitted that the appellants are facing final hardship and now are under loss and relied on the Chartered Accountant's certificate. They also relied on the judgments rendered by the Commissioner (Appeals) in another matter in Order-in-Appeal No. 4/2001 wherein he has dismissed the Revenue appeal pertaining to the licensing issue and not on the benefit of notification in question. Ld. Counsel further relied on the judgment rendered by the Tribunal in the case of Mod Apparel Exports v. CC, Calcutta, 1996 (86) ELT 388 (T) which deals with the coated fabrics being 'insole' for use in leather footwear industry.

4. Appearing on behalf of the Revenue Ld. DR Shri C. Mani distinguishes the judgments. Ld. DR submits that the HSN explanatory note and the opinion of CLRI are sufficient to hold that the imported items cannot be used as 'insole/midsole'. Ld. Counsel submits that no samples were drawn and the report obtained cannot be relied on.

5. On a careful consideration, after hearing both sides, prima facie, we notice that report of CLRI and HSN explanatory note are not in favour of the appellants. However, taking into overall facts and circumstances including the plea financial hardship into account, we direct the appellants to pre-deposit a sum of Rs. 1 lakh within a period of 2 months. On such pre-deposit of Rs. 1 lakh the balance of amount of duty and penalty waived and recovery stayed till the disposal of the appeal. If the amount of Rs. 1 lakh is not pre-deposited within the stipulated period, then the appeal shall be liable for dismissal in terms Section 129 E of the Customs Act, 1962. To come up for reporting compliance on 18.2.2004.