ORDER
1. This is a stay application filed with reference to the order of the Additional Collector of Customs, New Delhi dated 31.8.1990.
2. The learned senior advocate Shri. P. Chidambaram stated that in this case they had imported polyester fibre both with prime quality and waste under an advance licence issued under the DEEC Scheme. They have utilised this material for producing products in the form of synthetic silver/tops and presented them for export within the time allowed. The Delhi Customs had okayed the same and as it was to be shipped from Bombay, the consignment was also presented subsequently to the Bombay Customs. Samples were drawn and goods were allowed to be exported subject to test results.
3. Earlier the Delhi Customs had also drawn samples and sent them for testing.
4. The department has made out this case on the ground that the conditions under which the polyester fibre was originally allowed to be imported have not been fulfilled and the goods have been misdeclared at the time of exportation as the major proportion of exported consignment vas that of waste and not that of prime-quality fibre although they had declared 50% : 50% ratio at the time of exportation.
5. It was their contention that they had similarly exported several consignments both before and after the present consignment and the same were allowed without any objection.
6. Further the Delhi Customs had also tested the consignments and found everything O.K. and they had also produced certificate from various research associations and Test Laboratories and all of them had stated that there was no standard test laid down for determining the percentage proportion of prime-quality fibre and waste material in a mixed product made of such polyester fibres.
7. In spite of it the department had relied upon only one of the reports given by BTRA (Page 116) and it was their contention that this was obtained under influence and even this organisation accepted that there was no standard test and there was no way of knowing the exact proportion.
8. In the circumstances, the allegations were not correct. It was their submission that they had fulfilled all the obligations and they have not committed any offence and they were not liable to any penalty. Hence they would request that the pre-deposit of penalty of Rs. 4,00,000/- (Rupees four lakhs only) imposed on them may be waived and the operation of the order may be stayed during the pendency of the appeal.
9. The learned DR reiterated the department’s point or view as reflected in the order-in-original.
10. He emphasised that by misdeclaring the proportion or the ratio between the prime-quality fibre and waste quality fibre in the export product the appellant was trying to evade the duty.
11. The department has relied upon the report of the BTRA. This report was of course based on experience but then experience could be relied upon for testing and was indeed the accepted way of testing in many instances as mentioned by the learned Additional Collector in his order. In this connection he would draw attention to the discussion portion given (at page 8 and 9 of the order). It is in view of this discussion and findings only that the learned Additional Collector has gone to the extent of ordering amendment to DEEC book.
12. It was his submission that as it was a case of serious violation attracting Section 111(o) and Section 112 on the import side and attracting Section 113(i) and Section 114 on the export side.
13. He would also like to draw attention to Export Control Order, 1977 (No. 1/77-BTC dated 24.3.1977 Sub-clause 3 of Clause 3 thereof).
14. It was his contention that as there has been violation of provision of law both on the import and export sides therefore the department has got a prima facie strong case.
15. The appellants have not pleaded any financial difficulty and have not filed any balance sheet, etc.
16. In the circumstances he would request that their application may be rejected.
17. The learned advocate for the appellant drew attention to the import licence under which the goods were initially imported and the conditions attached to it and further stated that he would like to clarify that there is no specific condition about any proportion of contents in the Export product; and the only requirement was that the imported materials should be used for manufacture of the export product. The appellant had however declared the percentage proportion at the time of export; and he would only reiterate that in view of various opinions which they have cited it could not be said that they had violated any condition or there was any misdeclaration on their part.
18. We have carefully considered the submissions of both the sides.
19. We observe that neither from the licence nor from the conditions attached to it any specific condition regarding any proportion of ingredients in the export product could be shown to us at this stage.
20. In so far as the question of test report is concerned, the point is arguable and it will be more appropriate to take this point at the stage of main hearing.
21. Further although the learned DR has stated that evasion of duty is involved, the department has not been able to show to us at this stage as to what is the quantum of duty if any which has been demanded.
22. Looking to the totality of facts and circumstances and noting the above points in particular, we consider that the appellants have got a prima facie case in their favour.
23. We also observe that it has been stated at the bar that they have already executed a bond before the JCCI in terms of the conditions of the DEEC Scheme and also given an undertaking to the Customs at the time of export of the goods. Noting the point as well we feel that the balance of convenience is also in their favour.
24. In the circumstances we feel that it will be appropriate to waive the pre-deposit of the amount of penalty in question subject to the appellants executing a bond before the proper officer regarding the amount of penalty in question within eight weeks of the date of receipt of this order.
25. It is ordered accordingly.
26. The matter will come up for mention (for reporting compliance) on 14 May, 1991.