Judgment:
1. This application is for waiver of penalty imposed of Rs. 10,00,00,000/- (Rupees ten crores only) on the applicants for having imported a product and declaring it as heptene and nonene on the bill of entry and claiming the benefit of notifications 35/1990, 46/1992 and 19/1994 which give exemption to ATF and motor spirit. The applicants are engaged in the manufacture of oxo alcohol. Nonene and heptene were under OGL while naphtha was canalised.
2. The lower authorities have taken out a proceeding which has resulted in the liability to confiscation of the said goods under the provisions of Section 111(d) of the Customs Act, 1962 inasmuch as these goods were held to require a licence for the clearance. Since the goods were not available for confiscation, they having been released to the applicants for use in their factory premises, therefore the Commissioner imposed a penalty of Rs. 10 crores under Section 112(a) of the Customs Act.
3. The matter had earlier come up before this Tribunal and at that stage, after waiver of pre-deposit of penalty of Rs. 10 crores imposed, remanded the matter vide its order No. 975-76/98/WRB dated 11.4.1998 for de novo adjudication. The Commissioner, vide the order now impugned before us, heard the applicants and has redetermined the issues and confirmed the penalty of Rs. 10 crores under Section 112(a) of the Customs Act.
4. The learned advocate for the applicants contends in one hand that a letter of M/s. Indian Oil Corporation Ltd., written by its assistant manager, was on the record of the Commissioner in these proceedings and was not considered in spite of the directions in remand to consider all materials. It was also submitted that the directions of the DGFT dated 17.12.1997 have not been complied with, even though certificates showing the use of the return stream were on record in parallel proceedings before the department. It was also submitted by the learned advocate that if these certificates were considered, then they should be granted the benefit of DGFT waiver of condition of the resale of the return stream, vide their letter dated 17.12.1997 and they were not so liable to any penalty. The learned advocate took us through the Balance Sheet of the applicant company which discloses that as on 31.3.2005, they have a loss of Rs. 12.20 crores and in the earlier year the said loss was Rs. 17.74 crores. He submits that they are a BIFR company and pleads for full waiver of the pre-deposit requirement under Section 129E of the Customs Act to hear this appeal.
5. The learned SDR on the other hand takes us through the letter dated 17.12.1997 of DGFT and submits that this letter exempts and is applicable only to import of naphtha and return stream of such naphtha.
He submits that the letter relied upon by the advocate of Indian Oil Corporation, which he is making a grievance about, is stating that heptene is not known and understood as naphtha. The certificates of consumption of the return stream are also certifying the utilisation and the return stream of nonene and heptene and not of naphtha.
6. Considering the submission in this matter, prima facie we are of the view that the waiver granted of the condition by the DGFT is not applicable to the subject imports in this case. The other issues raised will have to be gone into in detail at the regular hearing. At this prima facie stage considering the merits and the financial position as also the fact that this is the second round, we would consider this case to be appropriate to direct the applicants to terms of pre-deposit requirement to be effected under Section 129E of the Customs Act, 1962.
We would therefore direct the applicants to deposit Rs. 2,00,00,000/- (Rupees two crores only) and report compliance thereof within 12 (twelve) weeks, i.e. on 17.4.2006. On such compliance being reported, the matter would be listed for regular hearing. Failure to deposit and meet the requirements of Section 129E calls for dismissal of the appeal without any further notice.