TaxTMI 
TaxTMI 
2011 (10) TMI 442
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....of the petitioner, in clandestine removal of finished goods under the sale invoices of two units, namely, M/s. Fenil Control Gears and M/s. EXEC, search was carried out at the factory premises of the petitioner as well as at the residential premises of the partners as also at the units allegedly used as conduits in carrying out illegal activities and also at the premise of M/s. Megha Parcel Services (Transporters). 4. On the basis thereof, a show cause notice was issued to the petitioner-firm on 17th August, 2008. On due adjudication of the said show cause notice, Order-in-Original was passed by the Commissioner, Central Excise on dated 26th October, 2009, confirming the demand of central excise duty to the tune of Rs. 1,60,43,273/- (One Crores sixty lacs forty three thousand two hundred seventy three only) and equal amount of interest and penalty on the firm and penalty of Rs. 10.00 Lakhs on each partner, on confirming large scale evasion of central excise duty on excisable goods. 5. This order of Commissioner, Central Excise dated 17th October 2008 was challenged before the CESTAT by preferring four appeals being appeal No. E-125 to 128 of 2010 by the petitioner-f....
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....unal had simply disregarded that aspect while considering request. The second challenge is to the calculation made by the Commissioner, Central Excise in the order-in-original. It has been forcefully submitted that many of the vouchers are calculated more than once, which resulted in inflating the total demand of duty. He also raised the contentions that during the search conducted of various premises of the firm, all the material documents have been seized by the department. Despite repeated requests, no copy of such seized documents has been furnished, so as to make it possible for the petitioner to defend its case before adjudicating authorities. He also objected to the manner in which his application for stay of recovery, pending the appeal has been dealt with. 8. Per contra, Mr. Varun Patel learned counsel for the department urged this Court that this is a gross case of clandestine manufacturing and sale by the petitioner-firm using two other proprietary firms as conduits in large scale illegality committed from the year 2002-03. He also further urged the Court that Tribunal has aptly dealt with all the aspects raised before it and concluded correctly that there was no....
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....requirements as laid down by the Apex Court these led it to deny the request of waiver of pre-deposit. 13. Before this Court, an attempt is made to point out from the record produced, tax audit and annual report of the year 2009-10, and from annexure Form 3CD that for the assessment year 2010-11, a gross profit of the current year of the petitioner-firm is Rs. 55,67,096/- and in the preceding year, it was Rs. 45,60,805/-. It is no where complained nor pointed out from the petitioner's side either in oral submission or by way of any documentary evidence that the petitioner-company has become sick or needed to resort to fund for pumping life for working of the firm. On the contrary, it is pointed out from evidence that its financial condition is getting stronger every year. 14. The Tribunal while considering the petitioner's case of financial hardship on the basis of its balance-sheet and other statutory records observed as under : "Further, though the applicant has now placed on record the balance sheet, we are of the view that as the clandestine activities are never reflected in statutory records, no real view about the financial condition of the appellants can b....
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....here was no material presented before the Tribunal and nor the ones, which were produced were found to contain sufficiency of material so as to permit complete waiver of the pre-deposits. Before this Court, also as mentioned hereinbefore, papers of tax audit and tax reports as well as account of petitioner-firm do not in any manner are indicative of poor financial condition of the firm. At no point of time the company has experienced such a situation leading the Court to conclude its financial condition so as to allow the request of either complete waiver or reduce the amount of pre-deposit, as directed by the CESTAT. 16. The Apex Court in case of Benara Valves Ltd. and Others v. Commissioner of Central Excise (supra) carved out these principles for staying or dispensing with pre-deposit thus :- 6. Principles relating to grant of stay pending disposal of the matters before the concerned forums have been considered in several cases. It is to be noted that in such matters though discretion is available, the same has to be exercised judicially. 7. The applicable principles have been set out succinctly in Silliguri Municipality and Ors. v. Amalendu Das and Ors. ....
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....pose so as to safeguard the interest of revenue : Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing." 11. Two significant expressions used in the provisions are "undue hardship to such person" and safeguard the interest of revenue." Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35(f). One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka and Ors. (AIR 1994 SC 923) that under Indian conditions expression "Undue hardship" is normally related to economic hardship. "Undue" wh....