TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>High Court adjusts deposit amount due to financial constraints, affirming Tribunal decision</h1> The High Court modified the deposit amount due to financial constraints, balancing the appellant's financial situation with the Revenue's interests, while ... Waiver of pre deposit - Held that:- Even as per the balance sheet, which was placed before the Tribunal, the appellant was having an accumulated loss of ₹ 6.74 crores. That apart, the appellant has also complied with the direction given by the Tribunal to give undertaking before the jurisdictional Commissioner to the effect that they shall not dispose of the plant and machinery used by their subsidiary unit till the disposal of the appeal before the Tribunal. Thus, considering the facts and taking note of the financial hardship pleaded by the appellant and the undertaking given by the appellant to the effect that they shall not dispose of the plant and machinery used by their subsidiary unit, we deem it proper that the interest of the Revenue be protected if the appellant is directed to pre-deposit a sum of ₹ 50.00 lakhs instead of ₹ 1.00 crore as ordered by the Tribunal within a period of eight weeks from today - Decided in favour of assessee. Issues:- Modification of stay order due to financial hardship- Interpretation of Section 11E of the Central Excise Act- Tribunal's discretion in granting relief based on financial circumstances- Appellant's compliance with directions and accumulated lossesIssue 1: Modification of stay order due to financial hardshipThe appellant filed a Civil Miscellaneous Appeal against the Customs, Excise and Service Tax Appellate Tribunal's order directing a deposit of Rs. 1.00 crore within eight weeks and an undertaking not to dispose of machinery. The appellant cited financial hardship for not depositing the amount but provided the required undertaking. The Tribunal, considering the appellant's financial situation and the subsidiary's operations, refused to modify the order, relying on precedents that providing securities does not equate to cash deposits concerning Revenue interests.Issue 2: Interpretation of Section 11E of the Central Excise ActThe appellant argued that Section 11E of the Central Excise Act gives Revenue the first charge on the applicant's assets. The Tribunal, however, emphasized the financial aspects and the subsidiary's activities, indicating that the Tribunal's decision was based on financial considerations rather than statutory provisions like Section 11E.Issue 3: Tribunal's discretion in granting relief based on financial circumstancesThe appellant contended that they had a strong case on merits similar to another case and faced severe financial constraints, making it impossible to pay the directed amount. The High Court, after considering the financial hardship, directed the appellant to deposit Rs. 50.00 lakhs instead of Rs. 1.00 crore within eight weeks, aiming to balance the appellant's financial situation with the Revenue's interests.Issue 4: Appellant's compliance with directions and accumulated lossesThe appellant, despite having an accumulated loss of Rs. 6.74 crores as per the balance sheet, complied with the Tribunal's direction not to dispose of machinery used by the subsidiary. The High Court, acknowledging the financial hardship and the undertaken compliance, modified the deposit amount while upholding the Tribunal's order, ensuring the Revenue's interest protection.In conclusion, the High Court modified the deposit amount due to financial constraints, balancing the appellant's financial situation with the Revenue's interests, while affirming the Tribunal's decision on other aspects.
TaxTMI 
TaxTMI 
