Bell Ceramics Ltd. Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. the impugned order of the commissioner of customs has confirmed against the appellants a demand of duty of over rs. 6 crores and has imposed on them a penalty of equal amount. this order is based on a finding that the appellants had taken the double benefit of modvat credit under rule 57a and duty-free import of raw materials under a value based advance licence. the finding recorded by the commissioner is that, though the appellants had declared that they had not obtained input stage credit under rule 56 a or 57a of the central excise rules, 1944 on the materials utilized by them for discharging export obligation under the said licence, they had not furnished proof of non-availment of such credit. yet another finding recorded by the commissioner is that the jurisdictional assistant commissioner had not clarified as to whether the reversal of modvat credit by the party was in terms of the ministry's circular no. 285/1/97/cx dt. 10.1.97. in the present application, waiver of predeposit and stay of recovery are prayed for under section 129e of the customs act.2. a preliminary submission is made by ld. dr. he submits that the appeal has been filed long after the impugned order was passed and that there could be delay in the filing of the appeal. countering this submission, ld. counsel submits that, as evidenced by record, the impugned order was issued and despatched by speed post to their factory situated in a remote village where there is no speed post facility. it is submitted that there is no provision for such despatch in the customs act, section 153 whereof only provides for dispatch of orders, notice etc. by registered post. it is, therefore, submitted that the impugned order has not been served on the appellants in terms of section 153 ibid. having regard to these submissions, we are of the view that the application for stay can be considered at present and the dr can ascertain the correct facts from the jurisdictional commissionerate as to the mode of despatch and service of the impugned order, and present the same to us by the time the appeal arises for final hearing.3. both sides have addressed us on the stay application. we have examined the records and considered the submissions. in appears to us that the impugned order has been passed without proper application of mind to the evidence on record. though the order notes the appellants plea that they had reversed the modvat credit as early as in 1995 and also notes the assistant commissioner's communication of that fact, the commissioner's finding is that there is no evidence of reversal of the credit. further, referring to the letter dt. 12.11.99 of the assistant commissioner, the commissioner says that the said letter of the assistant commissioner does not "clearly clarity" as to whether the reversal of the credit was in terms of ministry's circular no.285/1/97-07 dt. 10.1.1997. had the commissioner had any doubt on the pointy still lingering in his mind, he should have sought further clarification from the assistant commissioner before passing the impugned order. considering all these, we are of the view that waiver of predeposit and stay of recovery should be granted in this case.accordingly the present application is allowed and the appeal is directed to be posted for hearing. in view of the revenue's interest, the appeal will be heard as early as possible. accordingly the appeal is posted to 4.12.2003. order by dasthi.

Judgment:
1. The impugned order of the Commissioner of Customs has confirmed against the appellants a demand of duty of over Rs. 6 crores and has imposed on them a penalty of equal amount. This order is based on a finding that the appellants had taken the double benefit of Modvat credit under Rule 57A and duty-free import of raw materials under a Value Based Advance Licence. The finding recorded by the Commissioner is that, though the appellants had declared that they had not obtained input stage credit under Rule 56 A or 57A of the Central Excise Rules, 1944 on the materials utilized by them for discharging export obligation under the said licence, they had not furnished proof of non-availment of such credit. Yet another finding recorded by the Commissioner is that the jurisdictional Assistant Commissioner had not clarified as to whether the reversal of Modvat credit by the party was in terms of the Ministry's Circular No. 285/1/97/CX dt. 10.1.97. In the present application, waiver of predeposit and stay of recovery are prayed for under Section 129E of the Customs Act.

2. A preliminary submission is made by Ld. DR. He submits that the appeal has been filed long after the impugned order was passed and that there could be delay in the filing of the appeal. Countering this submission, Ld. Counsel submits that, as evidenced by record, the impugned order was issued and despatched by Speed Post to their factory situated in a remote Village where there is no Speed Post facility. It is submitted that there is no provision for such despatch in the Customs Act, Section 153 whereof only provides for dispatch of orders, notice etc. by Registered Post. It is, therefore, submitted that the impugned order has not been served on the appellants in terms of Section 153 ibid. Having regard to these submissions, we are of the view that the application for stay can be considered at present and the DR can ascertain the correct facts from the jurisdictional Commissionerate as to the mode of despatch and service of the impugned order, and present the same to us by the time the appeal arises for final hearing.

3. Both sides have addressed us on the stay application. We have examined the records and considered the submissions. In appears to us that the impugned order has been passed without proper application of mind to the evidence on record. Though the order notes the appellants plea that they had reversed the Modvat credit as early as in 1995 and also notes the Assistant Commissioner's communication of that fact, the Commissioner's finding is that there is no evidence of reversal of the credit. Further, referring to the letter dt. 12.11.99 of the Assistant Commissioner, the Commissioner says that the said letter of the Assistant Commissioner does not "clearly clarity" as to whether the reversal of the credit was in terms of Ministry's Circular No.285/1/97-07 dt. 10.1.1997. Had the Commissioner had any doubt on the pointy still lingering in his mind, he should have sought further clarification from the Assistant Commissioner before passing the impugned order. Considering all these, we are of the view that waiver of predeposit and stay of recovery should be granted in this case.

Accordingly the present application is allowed and the appeal is directed to be posted for hearing. In view of the Revenue's interest, the appeal will be heard as early as possible. Accordingly the appeal is posted to 4.12.2003. Order by Dasthi.