ORDER
Jyoti Balasundaram
1.
Stay application No. C/Stay/776/2001-A arises out of order in original No. 3/CCP/LKO/2001 dated 12.2.2001 under which a duty demand of Rs.9,88,374/- has been confirmed on 63480 pairs of shoes cleared at NIL rate of duty under Section 28 of the Customs Act, 1962 alongwith interest @ 24% per annum under Section 28AB, and penalty of Rs.2.5 lakh has been imposed. Stay application No.C/Stay/777/2001-A aries out of order in original No.2/CCP/LKO/2000 under which demand of additional custom duty of Rs.52,792/- and special additional duty of Rs.15310/- (total Rs.68102/-) has been confirmed on 3390 pairs of shoe already cleared at NIL rate of duty under Section 28 of the Customs Act alongiwth interest @ 24% per annum Section 28 AB, and penalty of Rs.1 lakh has been imposed.
2. In both cases the demands arise as a result of denial of benefit of exemption from payment of additional custom duty @ 16% advalorem which benefit is available to footwear whose retail sale price does not exceed Rs. 125/- per pair – it is the case of the department based on market enquiries and statement of retailer of sports shoes of Nepalese origin imported by the applicant herein that they were sold at a price exceeding Rs.125/- per pair. The second application relates to seizure of sports shoes from the applicant’s godown on 19.3.2000.
3. We have heard Shri. M.Venkataraman, ld. Advocate and Shri P.K.Jain, ld. SDR.
4. Basic custom duty on the goods in question namely, sports shoes of Nepalese origin bearing brand name ‘GOLDSTAR’ is admittedly not payable as such duty is exempt under Notification NO. 37/96-Cus dated 23.7.96. Additional Custom duty leviable under Section 3 of the Customs Tariff Act, 1975, equivalent to Central Excise duty for the time being leviable on like articles, if produced or manufactured in India, was also not being paid by the applicants as they were declared to be classifiable under sub-heading NO.6401.12 of the schedule to the CETA, 1985 (relating to shoes of per pair MRP less than Rs.125/- on which Central Excise duty is NIL). Special additional duty was also not charged on clearances/import made after February, 2000 in view of the provisions/conditions specified in Notification No. 18/2000-Cus dated 1.3.2000, according to which all goods which are exempt from (a) the whole of custom duty leviable thereon under the First Schedule, and (b) the whole of additional duty of Custom leviable thereon under sub-section 1 of the Section 3
of Customs Tariff Act, 1975, will attract NIL rate of special additional duty. The dispute in the present cases relate to levy of additional Custom duty. The department had conducted market enquiries and cash memos dated 18.04.2000 issued by M/s.Rajpal Shoes, Haldwani and M/s Agrawal Boot House, Haldwani showed that the maximum retail price of ‘GOLDSTAR’ sports shoes was approximately Rs.200/- per pair. The statement of some retailers was also recorded in which they stated the retail price of shoes imported by the applicants was in excess of Rs. 125/-. Learned Counsel submits that although Shri Amreek Singh, Proprietor of M/s Pal Boot House, Kashipur retailer of goods in question and Shri Amit Kumar Gupta, Proprietor of M/s City Craze also retaielr of the disputed goods, had stated that they have purchased goods in question from the applicants during the period in dispute and the retial sale price was exceeding Rs. 125/-, both these persons filed affidavits subsequently stating that bills have been obtained from their shops by the Customs Officers under threat and coercion. He, therefore, submits that the statements cannot be relied upon. We note that the department has also relied upon the statement of the Proprietor of the applicant who was given an opportunity to substantiate the declaration regarding retail sale price, but he did not avail of the opportunity. The issue on merits is highly debatable, requiring detailed analysis of all the evidence on record and hence it cannot be said that the applicants have made out a strong prima facie case for total waiver. Having regard to the over all picture and noting that the applicant’s financial position is not very rosy, we direct pre-deposit of Rs.3 lakhs out of the duty demand of Rs.9,88,374/-, and Rs.25,000/- out of the duty demand of Rs.68,102/-,within a period of 8(eight) weeks from today. On such deposit, pre-deposit of balance duty and the penalty shall stand waived and recovery thereof stayed pending the appeals. Failure to comply with the direction shall result in vacation of stay and dismissal of appeals without further notice.
5. Compliance to be reported on 6.9.2001.
(Pronounced & dictated).