Murarka Cables and Conductors Ltd. Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. arguing on the application for waiver of pre-deposit of duty of rs. 10,91,294/- and penalty of rs. 5 lakhs the applicants submit that the demand is prima facie not sustainable as it has been confirmed as a result of denial of the benefit of notification no. 77/80 for non fulfilment of export obligation, as the imported goods were stolen in a theft which took place in the factory in april, 1994 and which was intimated to the authorities concerned, and therefore could not be used in the manufacture of final products to be exported. their further contention is that the demand is barred by limitation as the show cause notice has been issued beyond a period of six months from the date of detection of the shortage due to theft. lastly it is their contention that the show cause notice is without jurisdiction as the notification in question requires the satisfaction of the commissioner for proper accountal of the goods while in the present case the show cause notice was issued by the deputy commissioner of customs. for all these reasons they pray that the pre-deposit may be waived and recovery stayed pending the appeal.2. the prayer is opposed by the learned dr who reiterates the findings of the authorities below that the applicant having failed to fulfil their export obligation within one year from the clearance of the imported goods duty free, were liable to pay duty as applicable without extending the benefit of the notification.3. we have carefully considered the rival submissions and find prima facie force in the contention that the goods were stolen and therefore could not be used for fulfilment of the export obligation and the applicants were entitled for remission of duty on such goods,and also see prima facie substance in the plea that the demand is barred by limitation (stock taking was conducted only in april, 1945 when the shortage was noticed and in february, 1996 the customs authorities visited the factory along with police officers in connection with the fir lodged). we are therefore of the view that a strong prima facie case for waiver has been made out by the applicants and hence dispense with the requirement of pre-deposit of duty and penalty and stay recovery thereof pending the appeal.

Judgment:
1. Arguing on the application for waiver of pre-deposit of duty of Rs. 10,91,294/- and penalty of Rs. 5 lakhs the applicants submit that the demand is prima facie not sustainable as it has been confirmed as a result of denial of the benefit of Notification No. 77/80 for non fulfilment of export obligation, as the imported goods were stolen in a theft which took place in the factory in April, 1994 and which was intimated to the authorities concerned, and therefore could not be used in the manufacture of final products to be exported. Their further contention is that the demand is barred by limitation as the show cause notice has been issued beyond a period of six months from the date of detection of the shortage due to theft. Lastly it is their contention that the show cause notice is without jurisdiction as the Notification in question requires the satisfaction of the Commissioner for proper accountal of the goods while in the present case the show cause notice was issued by the Deputy Commissioner of Customs. For all these reasons they pray that the pre-deposit may be waived and recovery stayed pending the appeal.

2. The prayer is opposed by the learned DR who reiterates the findings of the authorities below that the applicant having failed to fulfil their export obligation within one year from the clearance of the imported goods duty free, were liable to pay duty as applicable without extending the benefit of the notification.

3. We have carefully considered the rival submissions and find prima facie force in the contention that the goods were stolen and therefore could not be used for fulfilment of the export obligation and the applicants were entitled for remission of duty on such goods,and also see prima facie substance in the plea that the demand is barred by limitation (stock taking was conducted only in April, 1945 when the shortage was noticed and in February, 1996 the customs authorities visited the factory along with Police Officers in connection with the FIR lodged). We are therefore of the view that a strong prima facie case for waiver has been made out by the applicants and hence dispense with the requirement of pre-deposit of duty and penalty and stay recovery thereof pending the appeal.