Disposed

Jay Kay Enterprises Ltd. v. the Commissioner of Customs (Import)

Bombay HC3 Jul 2012CUAPP/78/2012

Case brief

AI extract

What is this about?

The High Court considered a customs appeal challenging a CESTAT order mandating a 50% deposit on differential duty. The Court modified the deposit requirement to Rs.30 lacs to align with the redemption fine for imported machines declared as spares, stayed merits hearing pending deposit, and directed the CESTAT to dispose of the appeal on merits without being influenced by this interim order.

What did the court decide?

The order of CESTAT directing 50% pre-deposit was modified to direct deposit of Rs.30 lacs within four weeks. The CESTAT is directed to hear the appeal on merits and pass an order. All contentions are

Jay Kay Enterprises Ltd. Vs the Commissioner of Customs… — Customs and Excise | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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CUSTOMS APPEAL (LOD) NO.32 OF 2012

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Jay Kay Enterprises Ltd.

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..Appellant.

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V/s.

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The Commissioner of Customs (Import)

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..Respondent.

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Mr. V. Shridharan, senior Advocare with Prakash Shah i/b. PDS Legal for the appellant.

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Mr. Pradeep S. Jetly for the respondent.

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CORAM : J.P. DEVADHAR AND R.Y. GANOO, JJ.

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DATED : 3RD JULY, 2012

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P.C. :-

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For entertaining the appeal against the order in original dated 31^st March, 2010, whether the CESTAT was justified for directing the appellant-assessee to deposit 50% of the customs duty confirmed by the said order in original, is the question raised in this appeal. The appeal is admitted on the above question and taken up for final hearing by consent of parties.

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As per two import licences dated 6^th October, 1981 and 9^th November, 1984, the assessee was entitled to import 8 High Speed Take up machines and also import spares and accessories for expansion of the Polyester Filament Yarn Unit at Kota from 960 tons per annum to 6960 tons per annum. Imports under the said licences were allowed clearance at concessional rate of duty under Project Import Regulations.

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Accordingly, imports under the aforesaid licences were allowed clearance on provisional assessment basis. However, according to the revenue no steps were taken by the assessee for years together for finalisation of the provisional assessment by submitting documents such as reconciliation statement, original triplicate bills of entry, custom / bank attested invoice, bank remittance certificate and installation certificate, etc. inter alia certifying the receipt and installation of the goods imported at the project site by the assessee.

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It is only when the customs authorities received information to the effect that in the guise of spares and accessories the appellant imported two additional high speed take up machines and shifted the same from the polyester filament yarn plant to polyester staple fibre

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plant, proceedings were initiated and by an order in original dated 31^st March, 2010 held that the importation of two additional machines by mis-declaring them as spares and accessories was in violation of the provisions of the Customs Act. Since the goods were not available for confiscation, redemption fine of Rs.30 lacs were imposed. On account of the violations of the provisions of the Customs Act and the Regulations, the benefit of the concessional rate of duty under the Project Import Regulation was denied to the assessee and the assessee was called upon to pay the differential duty amounting to Rs.8.37 crores with interest and penalty of Rs.15 lakhs was also imposed.

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On appeal, the Tribunal by the impugned order dated 4^th January, 2012 directed the appellant to deposit of 50% of the differential duty confirmed by the order in original dated 31^st March, 2010. Miscellaneous Application filed by the assessee has also been dismissed on 19^th April, 2012. Hence this appeal is filed by the appellant-assessee.

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The pre-deposit has been ordered mainly on the ground that the assessee has failed to submit reconciliation report in respect of one of the licence and that the assessee had imported two additional

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machines under the guise of spares and accessories and shifted the same from polyester filament unit to staple fibre unit which is in violation of the Projection Import Regulations.

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With reference to the reconciliation report it is contended on behalf of the assessee that in view of the long lapse of time in finalising the provisional assessment, the assessee could not produce acknowledgement to show that reconciliation report was in fact filed before the concerned authority in respect of both the licences. It is contended that recently the assessee has traced out a letter with acknowledgement which establishes that reconciliation report was in fact filed for the second licence also. Accordingly, it is contended that predeposit order on the ground of not furnishing the reconciliation report is not justified, when in fact it was submitted by the appellant.

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Similarly, in relation to the alleged importation of two additional machines and shifting the same from one unit to another without permission, it is contended that what is imported is only spares and accessories and not importation of additional machineries and that they have not shifted the machineries to another. However, on perusal of the adjudication order, it is seen that the adjudicating authority has recorded a finding that from the original packing list duly attested by

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the State Bank of India, Kanpur branch, it can be seen that the assessee has imported two additional machines in the guise of spares. If there is inconsistency in the original packing list and the packing list actually submitted to the customs authorities and the adjudicating authority has confiscated the said two machines and on account of the non availability of the machines has imposed redemption fine of Rs.30 lacs, then, in our opinion, the interest of justice would be met if the predeposit order is modified to the extent of Rs.30 lacs. Accordingly, we modify the order of the CESTAT by directing the assessee to deposit Rs.30 lacs within four weeks from today. If the assessee deposits the amount within four weeks from today, the Tribunal shall hear the appeal on merits and pass an order in accordance with law.

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We make it clear that the observations made herein are prima facie observations and the Tribunal shall dispose of the appeal on its own merits without being influenced by this order.

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The appeal is disposed of accordingly with no order as to costs. All contentions of the parties are kept open.

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Jay Kay Enterprises Ltd. v. the Commissioner of Customs (Import)

Case brief

What is this about?

What did the court decide?

Jay Kay Enterprises Ltd. v. the Commissioner of Customs (Import)

Case brief

What is this about?

What did the court decide?

What the court decided

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