CESTAT upholds penalty, allows installment payments. Appellants to pay in 10 installments. Court ensures revenue protection.

The court upheld the penalty imposed by CESTAT, dismissing stay applications and granting permission for installment payments of the remaining penalty amount. The appellants were required to pay the balance penalty in 10 equal installments due to financial constraints, with a specified schedule for payments. The court considered the delay in filing applications and directed the filing of affidavits for security of property. The respondent's opposition to the extension of time for payment was overruled, and the court ensured that revenue interests were protected throughout the installment payment process.

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Issues Involved:
Challenge to imposition of penalty by CESTAT, dismissal of stay applications, extension of time to deposit penalty amount, request to pay penalty in installments, opposition by respondent, consideration of delay in filing applications, modification of penalty amount order, granting permission for installment payments, schedule for installment payments, filing of affidavits for security of property.

Analysis of Judgment:

1. Challenge to Imposition of Penalty by CESTAT:
The appellants filed appeals against the order of CESTAT imposing a penalty of Rs.5.00 crores in each appeal. A partial amount of Rs.2.00 crores in each appeal had already been paid. The appellants sought to challenge the penalty imposition through these appeals.

2. Dismissal of Stay Applications:
The appellants had previously moved applications for stay of the penalty, which were dismissed by the court. The court observed that the appellants were financially stable and denied the stay. The appellants were directed to deposit the balance penalty amount within four weeks.

3. Extension of Time to Deposit Penalty Amount:
The appellants requested an extension of time to deposit the remaining penalty amount. They proposed to pay Rs.3.00 crores in 10 monthly installments of Rs.30.00 lakhs each due to financial constraints caused by losses and liquidity issues.

4. Opposition by Respondent:
The respondent opposed the appellants' request for an extension, arguing that the applications were filed belatedly as the appeals were already scheduled for a hearing. The respondent contended that there was no reason to grant an extension after the Supreme Court had dismissed the special leave petitions.

5. Consideration of Delay in Filing Applications:
The court noted that the appellants had filed special leave petitions against the previous order, justifying the delay in filing the current applications. The court found no merit in the respondent's argument regarding the delay in filing the applications.

6. Modification of Penalty Amount Order:
The court clarified that it was not modifying the penalty amount imposed by the previous order. The appellants were required to comply with the order to deposit the entire balance penalty amount. The court considered the appellants' request to pay in installments separately.

7. Granting Permission for Installment Payments:
The court acknowledged the appellants' financial difficulties and permitted them to pay the remaining penalty amount in 10 equal installments of Rs.30.00 lakhs each, starting from January 2011. The court ensured that the revenue would not be prejudiced by this arrangement.

8. Schedule for Installment Payments:
The court specified the schedule for installment payments, requiring the appellants to pay Rs.90.00 lakhs by March 31, 2011, and subsequent installments by the 15th of each month until October 15, 2011. Any default in payment would result in forfeiture of the installment plan.

9. Filing of Affidavits for Security of Property:
The court directed the appellants to file affidavits undertaking the installment payments and providing security of the mentioned property to the satisfaction of the court's Registrar. The matter was fixed for further proceedings regarding the security and affidavits.

This detailed analysis covers the key issues addressed in the judgment, highlighting the court's considerations and decisions regarding the penalty imposition, extension of time for payment, and installment payment arrangements.

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