Court modifies pre-deposit order, allows alternative security to resolve Central Excise Appeals.

The Court addressed Central Excise Appeals concerning pre-deposit requirements, penalties on Directors and Manager, and cash pre-deposits. It emphasized evidence for penalty imposition and undue hardship in pre-deposit orders. The Court modified the pre-deposit order, permitting appellants to provide alternative security within a specified timeframe, resolving the Appeals.

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Issues:
1. Pre-deposit of duty and penalty by appellants in Central Excise Appeals.
2. Imposition of penalty on Directors and Manager of M/s LIPL.
3. Justification of directing appellants to deposit Rs.5 lakhs each in cash as pre-deposit for hearing the Appeal.

Issue 1: Pre-deposit of duty and penalty by appellants in Central Excise Appeals:
The judgment pertains to three Central Excise Appeals filed under Section 35-G of the Central Excise Act, 1944 against an order passed by the Appellate Tribunal directing each appellant to deposit a sum of Rs.5 lakhs. The Appellate Tribunal found certain demands unsustainable but upheld others related to clandestine removal. The appellants were directed to make pre-deposits towards duty and penalty. The Court dismissed an Appeal filed by M/s LIPL under Section 35-G, upholding the pre-deposit order.

Issue 2: Imposition of penalty on Directors and Manager of M/s LIPL:
The Commissioner Central Excise NOIDA had imposed duty and penalty on M/s LIPL, its Directors, and Manager. The Appellate Tribunal directed M/s LIPL to pre-deposit a specific amount towards duty and penalty, while also directing the Directors and Manager to deposit Rs.5 lakhs each. The issue raised was whether penalty could be imposed without evidence of their knowledge or reason to believe the goods were liable to confiscation, a matter pending before the Appellate Tribunal.

Issue 3: Justification of directing appellants to deposit Rs.5 lakhs each in cash:
The substantial question of law was whether the Appellate Tribunal was justified in directing the appellants to deposit Rs.5 lakhs each in cash as a pre-deposit for the Appeal hearing. The Court considered arguments citing the principles of undue hardship and the need for fairness in pre-deposit orders. It was contended that penalty on Directors and Manager should not have been imposed without evidence of their involvement in the alleged misconduct. The Court observed that the interest of the Revenue could be protected by allowing the appellants to furnish security other than cash or bank guarantee within a specified period.

The judgment addressed the issues of pre-deposit requirements, imposition of penalties on Directors and Manager, and the justification for cash pre-deposits in Central Excise Appeals. It highlighted the need for evidence in penalty imposition and the consideration of undue hardship in pre-deposit orders. Ultimately, the Court modified the pre-deposit order, allowing appellants to furnish security other than cash or bank guarantee within a specified timeframe, thereby disposing of the Appeals.

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