1994 (2) TMI 190 - AT - Customs

Tribunal waives pre-deposit, stays penalty recovery, citing appellant's financial condition.

The Tribunal, by majority decision, waived the pre-deposit requirement and stayed the penalty recovery, considering the appellant's financial condition ... Stay/Dispensation of pre-deposit Issues Involved:1. Modification of the Stay Order No. C/51/93-B2, dated 10-9-1993.2. Financial position and property ownership of the appellant.3. Evidence provided by the Collector of Customs.4. Appellant's rebuttal of Collector's affidavit.5. Requirement for pre-deposit of penalty amount.Detailed Analysis:1. Modification of the Stay Order No. C/51/93-B2, dated 10-9-1993:The appellant sought modification of the Stay Order No. C/51/93-B2, which directed the deposit of Rs. 10 lakhs and a bank guarantee of Rs. 15 lakhs. The Tribunal modified this order, requiring the appellant to deposit Rs. 5 lakhs in cash within eight weeks and produce two sureties with immovable property for the balance, free from encumbrance, to the Collector's satisfaction. This modification was based on the appellant's financial condition and the interest of justice.2. Financial Position and Property Ownership of the Appellant:The appellant denied owning significant property or having substantial financial resources. He rebutted allegations of owning land and property, stating that his brother's land purchases were funded by the brother's son in America. The Tribunal noted the lack of documentary evidence linking the appellant to substantial property or wealth, despite the Collector's claims based on intelligence reports. The appellant's affidavit and supporting documents were considered credible in rebutting the Collector's allegations.3. Evidence Provided by the Collector of Customs:The Collector's affidavit alleged that the appellant was financially sound and owned property through circumstantial evidence and intelligence gathered by DRI, Bombay. The affidavit listed ten allegations indicating the appellant's financial soundness. However, the Tribunal found that intelligence reports alone could not substitute for concrete evidence. The Collector's claims were primarily based on suspicion rather than definitive proof.4. Appellant's Rebuttal of Collector's Affidavit:The appellant filed a detailed affidavit rebutting the Collector's allegations. He denied owning property, being involved in bank fraud, and having substantial personal wealth. The appellant provided documentary evidence, including a report from the Mandal Revenue Officer, confirming that neither he nor his close relatives owned property in the specified areas. The Tribunal found the appellant's rebuttal convincing and noted that the allegations were based on intelligence rather than solid evidence.5. Requirement for Pre-Deposit of Penalty Amount:The Tribunal considered the appellant's financial condition and the lack of concrete evidence from the Collector. Given the appellant's claims of financial hardship and the documentary evidence provided, the Tribunal decided to waive the pre-deposit requirement. The majority opinion favored unconditional stay of the penalty, aligning with the treatment given to other appellants in similar cases.Separate Judgments:Judicial Member's Opinion:The Judicial Member, S.L. Peeran, proposed modifying the stay order to require a Rs. 5 lakh cash deposit and sureties with immovable property for the balance. He emphasized the appellant's lack of a strong prima facie case and the circumstantial evidence suggesting property ownership.Technical Member's Opinion:The Technical Member, P.C. Jain, disagreed, advocating for an unconditional stay. He highlighted the lack of prima facie evidence of the appellant's financial soundness and the effective rebuttal of the Collector's allegations. He noted that the intelligence reports could not replace concrete evidence.Final Order:The third member, K.S. Venkataramani, concurred with the Technical Member, leading to a majority decision. The final order waived the pre-deposit of the penalty amount and stayed the recovery until the appeal's disposal. The case was to be listed for final hearing within two weeks.Conclusion:The Tribunal, by majority decision, waived the pre-deposit requirement and stayed the penalty recovery, considering the appellant's financial condition and the lack of concrete evidence from the Collector. The case was scheduled for an expedited hearing.