TaxTMI 
TaxTMI 
2014 (3) TMI 86
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.... per MT, the rate of duty on S.S.Billets was 12.5% ad-valorem. W.e.f. 01.03.94, the duty on 'OAS Billets' as well as 'S.S. Billets' become at the uniform rate of 12.5% ad-valorem. The first allegation against the appellant company is that during period prior to 01.03.94 i.e. during 05.08.93 to Feb.'94 period and during subsequent period from March94 to July94, they cleared S.S Billets by mis-declaring the same as 'OAS Billets' and by adopting this modus operandi, they evaded duty of Rs.1,83,94,168/- & Rs.88,12,974/- respectively. This allegation is based on the chemical test reports of CRCL according to which during this period the chromium content of the alloy steel billets being manufactured by them and cleared as 'OAS' steel billets was 10.5% or more, which would put them in the category of stainless steel, as against the appellant companys claim of the chromium content being less than 10.5%. 1.2 The other allegation against the appellant company is that during period from March94 to 10th Nov/'95, they evaded the duty in respect of clearances of Stainless Steel Billets by mis-declaring their value. The duty demand of Rs.4,25,54,960/- is based on this allegation. The Depar....
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....r Rule 173Q(1) of the Central Excise Rules, 1944; (d) Confiscated land, building, plant & machinery of the Appellant under Rule 173Q(2) of the Central Excise Rules, 1944 with option to be redeemed on redemption fine; and (e) imposed penalty of Rs.50 Lakh each on Sh. Anil Rathi, P. Rathi, Arun Rathi and penalty of Rs.5 Lakh of Sh. M.L. Aggarwal under Rule 209A of Central Excise Rules, 1944. 1.5 The above order of the Commissioner was challenged before the Tribunal by the Appellant company and other persons penalized, the Tribunal set aside the Commissioners Order and remanded the matter for de-novo adjudication with direction that all the relied upon documents must be supplied to the appellants and also the Department should give reasonable opportunity for cross-examination of the witnesses whose statement are relied upon by the Department. The Tribunal also directed that if the appellant company wants cross examination of any of their employees or any other witnesses, the same must be allowed. Besides this, the Tribunal also directed that the Departmental Officers who investigated the matter may also be made available for cross examination if the same is requested by the....
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.... However, since there was no stay of the earlier order of the Hon'ble High Court, the Tribunal, in the meantime, vide Final Order No. 142/08 dt. 08.04.08 dismissed the appeal filed by the appellant company for non-compliance of the provisions of Section 35F subject to decision of Hon'ble High Court in respect of the Review Petition. 1.9 In respect of the Review Petition Hon'ble High Court passed the order dt. 22.05.09 by which Hon'ble High Court remanded the matter to the Tribunal to consider the application for waiver from the requirement of pre-deposit and stay on recovery thereof, afresh in accordance in the law and also in the light of the observations made in this order. In this order, Hon'ble High Court has observed that from the records it is found that the Appellant company had filed an application in May 2007 before BIFR (case No 41/2007) and this fact was not there when Tribunal had passed the said order dt. 17.07.07 and that what is the effect of the same is to be considered by the Tribunal, keeping in view the earlier round of litigation and its outcome. 1.10 Accordingly the stay application was heard on 31.10.13 2. Heard both the sides in respect of stay appli....
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....ng Modvat credit of Rs. 57,54,829/- based on 'Maal Prapti reports', the Department's allegation that the goods covered under the invoices, on the basis on which this credit has been taken, were not received, is without any basis, that if the goods covered by the documents had not come to the factory, the production as shown in the RG-1 Register also would not have been possible, that since each of the duty paying documents was in respect of payment of duty of more than Rs. 10,000/-, the Range Officers had got the same verified from the Central Excise Authority of the place of origin of the documents and as such no discrepancy was found during such enquiry, that all the inputs had been received in factory either directly or through their Shahadra godown under sales tax forms and in every case the payment had been made through bank, that the Investigating Officers have not conducted any enquiry with the persons incharge of the material, person incharge of Shahadra depot through whom the goods had come, store incharge of the factory and security staff posted at the factory gate, that as regards the Modvat Credit of Rs. 35,53,237/- availed on the basis of duty paying documents alleged ....
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....e.f. March'94 there was no justification for the appellant for reducing price of the S.S. Billets when there was no change in the price for S.S. flats and S.S. Pattas/Pattis, that no manufacturer would sell the goods manufactured by him at price much below the prevailing market price, that this shows that the appellant during period of dispute had under declared price of S.S.Billets and the difference between the declared price and actual market price was being received by them in cash, that during period prior to March'94, the appellant were evading duty by mis-declaring 'S.S.Billets' being manufactured and cleared by them as 'OAS Billets' on which the duty was chargeable at specific rate of Rs.1000 PMT, that during period from March'94 when the rate on duty of OAS Billets and 'S.S. Billets' was made a uniform 12.5% adv, the appellant started under valuation of S.S. Billets, that Modvat Credit demand has been correctly confirmed, as the credit, in question, had been taken either without actually receiving the material or on the basis of documents which were not valid documents, that the directions of the Tribunal in its remand order have been compiled with as far as possible and t....
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....ty is of the opinion that pre-deposit of duty, interest thereon and penalty would cause undue hardship. Therefore unless the duty demand along with interest, if any, and penalty is paid or same waived either in full or partly by the Appellate Authority, the appeal would not be maintainable in terms of Apex Court's judgment in case of Vijay D Mehta reported in 1989(139) ELT-178 (SC) wherein with regard to Section 129E of Customs Act 1962, which is in pari materia with the provisions of Section 35F of Central Excise Act, 1944, it has been held that the pre-deposit of duty, interest and penalty pending appeal is obligatory except in the cases when the pre-deposit would cause undue hardship. 7. On the question as to what constitutes the undue hardship and which factors must be kept in mind while granting waiver from the requirement of pre-deposit under the provisions of Section 35F of the Central Excise Act, Hon'ble Andhra Pradesh High Court in case of SQL Star International, reported in 2012(276) ELT-465 (AP), relying upon :- (a) judgments of Apex Court in case of Benara Values reported in 2006 (204) ELT-513(SC), Indu Nissan Oxo Chemicals reported in 2008(221) ELT-7 (SC) and S.V....
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....cause irrepairable damage to the interests of the Revenue and if in such a situation dispensation from the provision of Section 35F is granted, conditions would be required to be imposed to safeguard of the interests of the Revenue after assessing the evidence on record. 7.2 Another principle laid down by the Apex Court in the case of Indu Nissan Oxo Chemical (Supra), wherein the Apex Court has relied upon its earlier judgments in case of Metal Box India Vs. CCE, reported in 2003 (155) ELT-13 (SC), is that the appellant being a sick unit under Sick Industrial Companies (Special Provisions) Act, 1985 would not protect the appellant from the provisions of Section 35F of Central Excise Act, and as such the question of waiver from the requirement of pre-deposit must be decided, keeping in view the twin consideration of undue hardship and safeguarding the interests of the Revenue. 7.3 The question of the waiver from the requirement of the pre-deposit in this case must therefore be decided keeping in view the above principles. The appellant would merit full waiver from the requirement of pre-deposit, if and only if, they have such a strong prima facie case in their favour which is ....
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....st of the samples drawn from OAS Steel have not been complied with. According to the Department the sample could not be drawn because of the non-cooperation of the appellant. In any case, from a number of test reports of the CRCL in respect of the samples drawn during the period of dispute from the goods declared as OAS Billets it is seen that the Chromium content of the steel was more than 10.5%, while in terms of Chapter Note 1(f) to Chapter 72 the Chromium content of Other Alloy Steel is required to be 0.3% or more but less than 10.5%. Therefore it cannot be said at this prima facie stage that the decision of the case is likely to result in exoneration of the Appellant on this court. 8.2. As regards the duty demand of Rs.4,25,54,960/- in respect of clearances of S.S.Billets during period from March'94 to 10.11.95, it is seen that during period prior to 01.03.94 when rate of duty on 'OAS Billets' was specific rate of Rs.1000 PMT and rate of duty on S.S. Billets was 12.5% adv. and only a small quantity of steel manufactured by the appellant was being cleared as S.S.Billets and bulk of the quantity was being cleared as OAS Billets (which according to the Department was actually ....