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Judgment
Rule; at the instance and request of Counsel for both the sides, the Rule is made returnable forthwith and at their instance, the petition is taken up for final hearing. By this petition under Article 226 of the Constitution of India, the petitioner challenges the order dated 9 January, 2013 passed by the Commissioner of Customs (Appeals), directing the petitioner to deposit the impugned demand for the purpose of entertaining the petitioner''s appeal on merits from the Order dated 11 June, 2012 passed by the Deputy Commissioner of Customs.
The Petitioner had agreed to supply, erect and commission of Waste Water Treatment Plant (in short "Plant") for one M/s. Indian Glycols Ltd., under a Purchase Order dated 16 March, 2004. In turn, the petitioner imported various goods for setting up the plant for M/s. Indian Glycols Limited and registered its imports for the plant as Project Import under the Project Import Regulations, 1986. In its application for registration under the Project Import Regulations, 1986, the petitioner had sought clearance of the imported goods as project import for initial setting up of Plant for industrial use. However, the department on enquiry, found that the goods were in fact imported not for initial setting up of Plant but for the substantial expansion of existing project of M/s. Indian Glycols Ltd. The petitioner while seeking registration as project imports classified the imported goods for plant under Chapter 98 Heading 98.01 of the First Schedule of the Customs Tariff Act, 1975 and claimed the benefit of Customs Notification No. 14 of 2004 dated 8 January, 2004.
By the adjudication order dated 11 June, 2012, the Deputy Commissioner of Customs held that the import of goods required for the plant was not for the purpose of initial setting up of a plant by M/s. Indian Glycols Ltd., but was for substantial expansion of M/s. Indian Glycols Ltd. The Deputy Commissioner of Customs by order dated 11 June, 2012, held that the imported goods were used for substantial expansion and not for initial setting up of a project. Consequently, the declaration given by the petitioner was held to be incorrect and the contract for project import was deregistered with immediate effect. The Deputy Commissioner of Customs held as under:-
ORDER
"1 Having regard to the facts and circumstances of the case, I hereby order the deregistration of the Contract with immediate effect.
2 I direct that the subject goods in question should be assessed on merits in their respective headings and charged to duty accordingly without the benefits of the Project Import Regulations, 1986.
3 I hereby order the execution of the PD Bond for amount of Rs. 1,02,33,264.00 to be adjusted against the duty payable on merits on the goods cleared by the Importer and 2% cash security of Rs. 2,04,666.00 vide Challan No. 388, dated 6-10-2004 against the duty payable."
From the above, it is clear that the order dated 11 June, 2012 of the Deputy Commissioner of Customs does not confirm and/or demand any duty amount from the petitioner. It merely deregisters the contract of Project Import and directs the assessment of goods on merits under their respective headings and consequent duty determination. Moreover, the P.D. bond and 2% cash security were to be adjusted against the duty payable on merits in respect of the goods cleared by the petitioner. Mr. Sharma, counsel for the respondents does not dispute the above position.
In view of the above, as no duty demand has been quantified by the order dated 11 June, 2012, no occasion to deposit any amount of duty for the purpose of the petitioner''s appeal being heard on merits by the Commissioner of Customs (Appeals) would arise. It is pertinent to note that the impugned order dated 9 January, 2013, nowhere records the amount of duty payable consequent to and/or in accordance with the order dated 11 June, 2012 passed by the Deputy Commissioner of Customs. This is for the reason that the amount of duty payable has yet to be quantified. In view of the above, the requirement of pre-deposit of any duty does not arise as duty demand has not yet been quantified by order dated 11 June, 2012. We are informed that the aforesaid exercise of classifying the imported goods on merit has not yet been carried out by the Customs Department. In the result, the appeal of the petitioner before the Commissioner of Customs (Appeals) from the order dated 11 June, 2012 passed by the Deputy Commissioner of Customs is to be heard on merits without insisting on any pre-deposit of duty.
Accordingly, we set aside the order dated 9 January, 2013 passed by the Commissioner of Customs (Appeals) and direct the Commissioner of Customs (Appeals) to hear the petitioner''s Appeal from Order dated 11 June, 2012 passed by the Deputy Commissioner of Customs on merits without insisting on any pre-deposit of duty. Rule made absolute in the above terms, with no order as to costs.