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of <h1>Tribunal orders 50% duty deposit, waivers possible on compliance. Consider merits, financial hardship.</h1> <h3>ALLIED ASIA GEARS LTD. Versus COMMISSIONER OF C. EX., INDORE</h3> The Tribunal directed the appellant to deposit 50% of the duty demand within a specified period, with the remaining amount of duty and penalties to be ... Stay/Dispensation of pre-deposit - Clandestine removal Issues:1. Application seeking waiver of pre-deposit under Section 35-F of the Central Excise Act.2. Interpretation of judgments in Sangfroid Remedies Ltd. v. Union of India and Mehsana Dist. Co-op. Milk P.U. Ltd. v. Union of India.3. Relevance of declaring a unit as a sick industry by the BIFR in dispensing with pre-deposit.4. Consideration of financial hardship and relevant factors in determining pre-deposit.5. Parameters for deciding pre-deposit applications under Section 35-F.6. Clandestine removal of goods and its impact on pre-deposit requirements.Analysis:1. The case involved an application for waiver of pre-deposit under Section 35-F of the Central Excise Act. The Tribunal, after a series of orders and appeals, directed the appellant to deposit 50% of the duty demand within a specified period, with the remaining amount of duty and penalties to be waived upon compliance.2. The judgment referred to decisions in Sangfroid Remedies Ltd. v. Union of India and Mehsana Dist. Co-op. Milk P.U. Ltd. v. Union of India. The former case highlighted the importance of notice and opportunity of hearing before demanding duty payment. The latter emphasized the need for considering prima facie merits and financial hardship in determining pre-deposit amounts.3. The relevance of declaring a unit as a sick industry by the BIFR was discussed. While the appellant argued for dispensing with pre-deposit due to this status, the court cited Metal Box India Ltd. v. CCE, Mumbai, stating that the Sick Industries Act does not cover pre-deposit requirements under the Central Excise Act.4. Financial hardship and other relevant factors were considered in the decision-making process for pre-deposit waivers. The court emphasized that in cases of clandestine removal of goods, balance sheets may not accurately reflect financial positions, and hence, full waivers were not granted.5. Parameters for deciding pre-deposit applications under Section 35-F were outlined based on the Mehsana Dist. Co-op. Milk P.U. Ltd. case. The Tribunal was required to assess the prima facie merit of the case and consider financial hardships before determining the pre-deposit amount.6. The case involved clandestine removal of goods, where discrepancies in records were found. Despite the appellant's argument of being a sick industry, the court held that there was no strong prima facie case for full waiver. Consequently, a 50% pre-deposit was ordered within a specified timeframe, with further recovery stayed pending appeal disposal.
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