TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 681
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Department carried out investigation into the allegations of large scale excise evasion by such companies. Culmination of such investigation resulted into issuance of different show cause notices to the Symphony Limited and other similarly situated manufacturers. Such notices were issued in or around February, 2010. It was alleged that the said entities had evaded excise duties worth Crores of rupees through a complex design. It is at this stage not necessary to go into the precise details of allegations against the respective parties. Suffice to record that the adjudicating authority i.e. Commissioner of Central Excise, Vadodara passed his order-in-original pursuant to such show cause notice on 21-4-2011. In addition to confiscation of the seized material, he confirmed a duty demand of Rs. 3,09,39,616/- from M/s. Polyset Plastics Private Limited. He ordered recovery of such sum with interest as provided under Section 11B of the Central Excise Act, 1944. He further imposed a penalty of matching sum on M/s. Polyset Plastics Private Limited under Section 11AC of the Central Excise Act, 1944. He imposed a further penalty of Rs. 65 Lacs under Rule 26 of the Central Excise Rules, 2002....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y demand could have been made against such a Company. He relied on the decision of the Apex Court in case of Gajanan Fabrics Distributors v. Collector of Central Excise, Pune reported in 1997 (92) E.L.T. 451 (S.C.) in this respect. Counsel further submitted that the Tribunal ought to have waived the entire pre-deposit in view of a strong prima facie case of the petitioner. 6. Section 35F of the Act pertains to deposit pending appeal of duty demand or penalty levied. It provides inter alia that whether in any appeal under Chapter 6A of the Central Excise Act, 1944, decision or order relating to any duty demanded in respect of goods, which are not under the control of Central Excise Authority or penalty is levied under the Act, the person desirous of appealing against such decision or order shall, pending the appeal deposit with the adjudicating authority the duty demanded or the penalty levied. First proviso to Section 35F however, authorizes the Commissioner (Appeals) or the Appellate Tribunal to dispense with such deposit, subject to such conditions as deemed fit to safeguard the interest of the Revenue, if the Appellate Authority or the Tribunal is of the opinion that depos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....One is undue hardship. This is a matter within the special knowledge of the appellant 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 that under Indian conditions expression "undue hardship" is normally related to economic hardship. "Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be "undue" it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word "undue" adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not be possible to consider every aspect of the case. In the facts and circumstance of this case, it cannot be said that appellants have been able to make out a prima facie case for complete waiver. Nevertheless, as far as the job workers are concerned slightly lenient view, in our opinion, is called for. For coming to this conclusion, we have taken note of the fact that in this case Symphony used their clout and capacity to market the products and their reputation to ensure that the profits made by OEMs was always limited and had nothing to do with the demand for products in the market. While there is a cap for the profit and the earnings of job workers based on Symphony's market, there is no cap for the earning of Symphony, who has exercised total control over every aspect of the transaction with the OEMs and the transaction of the OEMs with the Vendors. Under these circumstances, it would be appropriate to require Symphony also to deposit a portion of the penalty since they are the main party and main beneficiary of the whole arrangements and the transactions. Moreover when the law was amended Symphony had the responsibility to change the system of Valuation being the driving f....