1999 (6) TMI 179 - AT - Central Excise

Tribunal Rulings on Penalty Deposits & Recovery: Essex Marketing vs. Tosha International Ltd.

TOSHA INTERNATIONAL LTD. Versus COMMISSIONER OF C. EX., MEERUT

TOSHA INTERNATIONAL LTD. Versus COMMISSIONER OF C. EX., MEERUT - 1999 (114) E.L.T. 56 (Tribunal) Issues:Stay petitions under Central Excise Act and Customs Act arising from the same impugned order.Analysis:The case involved three stay petitions filed by different entities arising from the same impugned order, which were heard together and disposed of collectively. The primary issue revolved around the alleged violation of rules regarding the clearance of goods and payment of duty. M/s. Tosha International Ltd., engaged in manufacturing picture tubes, were accused of not following proper procedures in clearing glass neck tubes to M/s. Essex Marketing (P) Ltd. without paying the required differential duty and without adhering to Rule 57F of the Central Excise Rules, 1944. The goods were seized on the belief of being liable to confiscation, leading to a show cause notice being issued. The respondents argued that they had imported the goods for manufacturing purposes under a concessional rate but later sold them due to the factory becoming non-operational. They claimed to have deposited the differential duty promptly and cited reasons for not following certain procedural requirements.The legal representatives presented arguments regarding the compliance with Notification No. 64/95, the alleged unaccounted finished goods, and the imposition of penalties under relevant provisions. The issue of penalty deposition was a focal point, with the appellants requesting a waiver due to financial constraints, especially considering one of the companies being declared a sick company by BIFR. The Departmental Representative contended that the penalty should be deposited, emphasizing the financial stability of the company based on bank balances and assets exceeding liabilities. After considering the submissions and evidence, the Tribunal differentiated between the cases of M/s. Essex Marketing (P) Ltd. and M/s. Tosha International Ltd. In the former's case, the pre-deposit of penalty was waived, and recovery stayed. However, in the Customs case of M/s. Tosha International Ltd., the pre-deposit of penalty was waived, and recovery stayed during the appeal. Yet, in the Central Excise case of M/s. Tosha International Ltd., a partial penalty deposit of Rs. 50,000 was directed within a specified timeframe, with the balance amount recovery stayed during the appeal period. The Tribunal's decision aimed to balance the interests of the parties involved while ensuring compliance with legal provisions.Ultimately, the Tribunal disposed of the three stay petitions based on the specific circumstances and merits of each case, providing nuanced rulings to address the issues raised by the parties. The judgment highlighted the importance of procedural compliance, duty payment, financial considerations, and the discretion of the Tribunal in determining penalty waivers and recovery stays during the appeal process.