2009 (9) TMI 915 - HC - Central Excise

Delhi High Court Upholds CESTAT Order on Duty Deposit in Clandestine Goods Case

The High Court of Delhi upheld the order by CESTAT, directing the petitioners to deposit one third of the duty, interest, and penalty related to ... Pre-deposit - section 35F of the Central Excise Act - clandestine manufacture and removal - demand based on consumption of electricity - Held that:- There was no satisfactory explanation regarding excessive consumption of electricity during the relevant period by the appellants. Merely by relying upon certain formula and certificates stated to have been issued by State of Rajasthan and contending that the production of M/s. Shree Sharma Steel Rolling Mills (P) Ltd. was from ultra modern imported machinery with minimum requirement of operation whereas the factory of the appellants being manually operated is of no help, there was no other material placed before the adjudicating authority to disbelieve the contention that excessive consumption of electricity discloses clandestine manufacture and removal of the goods from the factory - there is no prima facie case being made out in support of the contention that the findings are not based on tangible evidence. In exercise of the extraordinary jurisdiction under Article 226 of the Constitution, it is not a case which calls for any interference - there is no scope of interference - appeal dismissed. The High Court of Delhi, consisting of A.K. Sikri and Valmiki J. Mehta, JJ., heard petitions filed against a common order by CESTAT. The order directed the petitioners to deposit one third of the duty demanded, along with interest and penalty. The Tribunal considered submissions from both parties and relevant case law in forming a prima facie view. After detailed analysis and discussion, the Tribunal exercised its discretion, directing, and directed the petitioners to pay one third of the duty, interest, and penalty. The Tribunal found a prima facie case for granting waiver in relation to pre-deposit under Section 35F of the Central Excise Act. The accusations against the appellants were related to clandestine manufacture of goods and evasion of duty, supported by evidence such as electricity consumption and supply of raw materials. The Tribunal dismissed the petitions, stating that the circumstances did not warrant interference under Article 226 of the Constitution. The time for making the payment was extended by four weeks.