ORDER
Moheb Ali M., Member (T)
1. These applications for waiver of pre-deposit of duty and penalties imposed on the applicant company and its Chairman arose on of the order of the Commissioner of Customs Air Port Mumbai.
2. The appellant company is an unit under SEEPZ, Mumbai. It imported gold duty free under Notification No. 177/94 Cus dt. 21.10.94. The imported gold has to be used in the manufacture of jewellery for export as per the condition of the notification under which gold is cleared. Stock verification conducted by the officers revealed that the company could not satisfactorily account for 14,431.59 gms. of gold valued at Rs. 60,22,879/-In the impugned order the Commissioner confirmed customs duty amounting to Rs. 46,31,595/- on the shortages indicated above. The applicant company also imported certain quantity of; diamonds under the above said notification free of duty. Diamonds imported under the said Notification are to be exported except to the extent of 5% value of such imports, which could be sold in the domestic market against valid REP or GEM REP or Diamond imprest licences. The allegation is that the applicant could not satisfactorily account for all the diamonds even after giving the allowance for broken diamonds/dust and therefore duty is demandable on such unaccounted diamonds. The total duty demand on this count is Rs. 2,53,79,203/-. The applicant paid Rs. 42,11,357/- out of the total demand.
4. Heard both sides.
5. In regard to shortage of gold the applicant contends that one Shri Godika had stolen 7 kgs of gold is in 97′ and another 5 kgs in 1998. In other words the applicant company admits that one of its employees did remove gold from the SEEPZ without payment of duty. In regard to shortages of diamonds it is contended that the value of shortages was calculated on the average value of the imported diamonds; that they contested the results of stock verification and that the shortages were imaginary.
6. The Ld. Consultant for the department however contended that gold was found short for one reason or the other and therefore duty is demandable. In regard to diamonds the Consultant argued that duty was demanded on 12495.30 cts. after giving allowance to all the factors stated by the applicant during the adjudication proceedings.
7. We observe prima facie the Department has established that the applicant failed to account for 14,431.59 gms. of gold. It appears that the duty demand on this quantity, prima facie, has meritiar as the diamonds are concerned the various contentions raised have to be gone into at a later stage, having regard to the facts and circumstances we direct; the appellant company to deposit Rs. 25 Lakhs towards duty on gold not accounted for. Upon such deposit further deposit of duty demanded on diamonds, gold and penalties imposed on the company and its Chairman are waived during the currency of the appeals. Failure to deposit the amount as directed would result in the dismissal of the appeal without further deposit.
8. Time given to pre-deposit Rs. 25 lakhs is eight weeks. Compliance on 18.3.05.
(Operative part pronounced in Court)