Avesthagen Ltd. vs Commissioner of Central Excise, Bangalore-V

Anand Byrareddy, J.—Heard the learned counsel for the petitioner and the learned counsel for the respondent.

The petitioner is said to be a public limited company engaged in the business of scientific research and export of research services and is claiming to be a 100% export oriented Software technology park industrial unit, having the necessary permissions and licences under the Foreign Trade Policy and the Customs Act, 1962, as well as other applicable laws. The petitioner is said to have commenced research activities and had also imported duty exempted goods which were duly bonded and warehoused in private bonded warehouses of ITPL, Whitefield, Bangalore.

The petitioner had also procured certain goods on payment of duty and had not claimed any duty exemption on such goods. These goods termed as �non-bonded goods�, were also used for their operations within the premises stated above. It is stated that these non-bonded duty paid goods are the absolute property of the petitioner and are not subject matter of any statutory or other restriction.

The petitioner having been served with an adjudication order passed by the respondent herein, wherein the duty free goods imported by the petitioner were confiscated under the provisions of the Customs Act, 1962 and also duty foregone on them, that is duties of Customs and Central Excise and other levies like fine and penalty came to be demanded by the Respondent No. 1 against the petitioner vide adjudication Order No. 02/14-15, dated 30-3-2015. Aggrieved by this order, the petitioner has preferred a statutory appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). However, the petitioner admits that it is facing a severe financial crunch and seeks to sell their non-bonded goods which are the absolute property of the petitioner and which are lying in the custom bonded warehouse, in order to raise the funds, not only to make deposit which is a pre-requisite of filing the appeal, but also it would enable the petitioner to save those goods which would otherwise deteriorate and would be wasted. Therefore, the petitioner had made such a request seeking permission to sell the same in the market. However, the respondents have rejected such a prayer and that the adjudication levies unless paid in full, the petitioner would not be allowed to remove the goods at all, either partially or otherwise and a notice of demand has been issued threatening action against the petitioner. It is in this piquant situation that the petitioner is before this Court.

In that, the petitioner is unable to make the pre-conditional deposit before the CESTAT in seeking appropriate reliefs and the respondent having remained firm in its decision that the non-bonded goods even if they are so, would not be allowed to be removed unless the petitioner made the entire demand, the petitioner is before this Court.

As rightly contended by the learned counsel for the petitioner, if the petitioner is placed on terms and under the strict supervision of the respondent, if the non-bonded goods which are the absolute property of the petitioner could be ascertained, the petitioner could be permitted to sell the same in favour of purchasers whom the petitioner may identify and if the monies raised are directly provided to the respondent or made to be deposited before the CESTAT to meet the demand of the pre-conditional deposit and the remaining amount if any could be handed over to the respondent in partial discharge of any liability, subject to the result of the appeal, it would meet the ends of justice.

Therefore, on sale of such goods, the amount shall firstly be deposited as a pre-conditional deposit before the CESTAT and the remaining amount under protest shall be appropriated by the respondent, subject to the result of the appeal. The CESTAT shall thereafter address the interim application or even the main appeal itself, with expedition. If the entire process should be completed within a period of three months if not earlier, it would meet the ends of justice. The petition is accordingly disposed of in terms as above.