2014 (4) TMI 760 - AT - Central Excise

Appellate Tribunal Upholds Deposit Order despite Financial Hardship

The Appellate Tribunal CESTAT AHMEDABAD upheld the Stay Order directing the appellant to deposit Rs.3.5 crores despite arguments on financial hardship and ... Modification of Stay Order - Assessee contends that Bench has passed a non-speaking order and has not considered the submissions made by the applicant in the memo of appeal as well as during the course of personal hearing - Held that:- while coming to a conclusion of directing the appellant to pre-deposit an amount of Rs.3.5 crores, prima facie, we found that there was note book and other documents which indicated movement of semi-finished goods without payment of duty and statement of transporters, director and employee. On a specific query from the Bench, Shri Kanti Mohan Mishra submitted that the statement given by the Director and employee are not retracted. He also submits that they are not disputing the recovery of notebook but the entries made in the note book are being disputed - After going through the balance sheet annexed with the application for modification of our Stay Order, we find that the balance sheet, though shows a loss, it also indicate that the appellant has given un-secured loan and considered to be good to others to the tune of Rs.32.52 crores, which definitely if recovered, can help them to deposit an amount of Rs.3.5 crores, which is ordered to be pre-deposited - appellant has not made out a case for any modification of our Stay Order which directed them to deposit an amount of Rs.3.5 crores - Modification denied. Issues: Modification of Stay Order directing pre-deposit of Rs.3.5 crores, non-speaking order, financial position of the assessee, evidences relied upon by adjudicating authority, balance sheet analysis, extension of time limit for deposit.Analysis:1. Modification of Stay Order: The appellant filed an application seeking modification of the Stay Order directing them to deposit Rs.3.5 crores. The appellant argued that the Bench had not considered their submissions and that they could provide evidence to dispute the Revenue's claims. The Bench noted evidence of movement of goods without duty payment and statements from relevant individuals. The appellant's arguments regarding non-retracted statements and disputed entries were considered but not found sufficient to modify the Stay Order.2. Financial Position of the Assessee: The appellant presented their financial position, showing a significant loss in the previous year. However, the balance sheet also revealed unsecured loans given by the appellant, indicating potential resources for the required deposit. Despite a confirmed demand of around Rs.19 crores, the Bench directed the appellant to deposit only Rs.3.5 crores, considering the overall circumstances.3. Evidences Relied Upon: The Bench emphasized that the evidences relied upon by the adjudicating authority needed to be appreciated at the time of final disposal of appeals. The appellant's arguments regarding lack of cross-examination and payment of duty to suppliers were not deemed sufficient to alter the Stay Order.4. Extension of Time Limit: While finding no grounds for modifying the Stay Order, the Bench extended the time limit for depositing Rs.3.5 crores by eight weeks, with a compliance deadline set for a specific date. Non-compliance would result in dismissal of the appeals without further hearing, emphasizing the importance of meeting the deposit requirements within the stipulated timeframe.This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT AHMEDABAD, providing insights into the considerations and decisions made regarding the modification of the Stay Order and the financial circumstances of the appellant.