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2010 DIGILAW 895 (KAR)

United Telecom Ltd. v. Commissioner of CUS

2010-08-13

H.S.KEMPANNA, N.KUMAR

body2010
JUDGMENT N. Kumar, J.— The Appellant has preferred this appeal challenging the order passed by the learned Single Judge, who set aside the order passed by the Tribunal waiving the pre-deposit in preferring the appeal filed challenging the order passed by the Commissioner of Appeals. 2. The Appellant is a public limited company, incorporated under the Companies Act, 1956, with the object of carrying on the business of manufacture and sale of telephone equipments and other allied objects. During the period September 2003 and December 2003, the Appellant imported certain consignment of parts/components and accessories of cellular phone, hand sets, which were exempted from payment of customs duty under Notification No. 21/2002, dated 1-3-2002. The Deputy Commissioner of Central Excise, Bangalore, issued certificate in this regard entitling the Appellant to claim exemption. Based or, the Bills of Entry, examination of goods and the declaration filed by the Appellant, assessment was made and the hills were cleared. After lapse of 2 years 3 months, the Deputy Commissioner and Assistant Commissioner of Customs, Bangalore, issued a show cause notice dated 5-6-2004 contending that the goods which are imported constitute cellular phone and hand sets, which are not exempted from payment of customs duty. The Appellant filed his reply. After hearing the Appellant, the adjudicating authority held that the Appellant has misclassified the goods and did not entitle for the benefit of exemption and therefore, he levied duty on the imported goods. 3. Aggrieved by the said order, the Appellant preferred an appeal before the Commissioner of Customs, who dismissed the said appeal. Being aggrieved by the said two orders, the Assessee preferred an appeal before the Customs, Excise & Service Tax Appellate Tribunal. Along with the appeal, he filed an application for waiving of pre-deposit. The Tribunal by a considered order, granted the Appellant full waiving of pre-deposit. The said order was challenged by the Revenue before this Court in Writ Petition No. 25431/2005. By the impugned order, the learned Single Judge held that the Appellant did not plead undue hardship as a ground of seeking full waiving of pre-deposit and therefore, the Tribunal was not justified in granting the full waiver. Therefore, it set aside the order of the Tribunal. Aggrieved by the said order, the Appellant has filed this appeal before this Court. 4. Therefore, it set aside the order of the Tribunal. Aggrieved by the said order, the Appellant has filed this appeal before this Court. 4. The learned Counsel for the Appellant assailing the order passed by the learned Single Judge, contended that, what is manufactured was the component of a mobile hand set, which is clearly exempted form payment of customs duty; in fact, the authorities accepted the said contention and extended the benefit and it is only after 2 years 3 months, proceedings were re-opened and the custom duty was sought to be levied. He further contended that, without challenging the earlier order of granting exemption, they could not have initiated this proceeding at all. Therefore, the proceedings initiated is one without jurisdiction and in support of his contention, he relied upon the judgment of the Apex Court in the case of Priya Blue Industries Ltd. Vs. Commissioner of Customs (Preventive), AIR 2004 SC 5115 He further contends that the Tribunal was justified in granting complete waiver of the pre-deposit and the learned Single Judge was not justified in interfering with the order solely on the ground that only in circumstances of undue hardship, such a power could be exercised by the Tribunal. Though the word 'undue hardship' is not used, in the facts of the case, it constitutes undue hardship, and the learned Single Judge committed an error in not properly appreciating the circumstances under which the said waiver is sought, and therefore, he submitted that the order of the learned Single Judge required to be interfered with Further he points out that, in a similar question which had arisen for consideration before the Bombay High Court, it upheld the contention of the Assessee and granted the benefit. The Revenue challenged the same before the Apex Court. The Apex Court declined to entertain the appeal on the ground that, in the facts they see no reason to interfere in the matter, which is reported in 2007 (211) ELT A45 (S.C.). By relying on this judgment, the Tribunal has waived the pre-deposit in other words, if the said judgment of the Supreme Court is applicable to the facts of this case, there is no liability to pay tax. By relying on this judgment, the Tribunal has waived the pre-deposit in other words, if the said judgment of the Supreme Court is applicable to the facts of this case, there is no liability to pay tax. When there is no liability to pay tax, merely because the authorities took a contrary view in an appeal, if the pre-deposit is insisted upon, it would not only cause undue hardship, but would also cause untold misery to the Appellant. In that view of the matter and in the facts of this case, we are satisfied that the order passed by the Tribunal granting complete waiver of pre-deposit was legal and justified. It ought not to have been interfered with by the learned Single Judge under Article 226 of the Constitution of India. In the result, the order of the learned Single Judge cannot be sustained. 5. In view of the above, the appeal is allowed. The order of the learned Single Judge is set aside. The order passed by the Tribunal is restored. The appeal shall be heard on merits and in accordance with law. It is expected that the Tribunal will dispose of appeal on merits expeditiously.