TaxTMI 
TaxTMI 
2013 (2) TMI 666
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....e Tribunal and as such they granted liberty to the petitioner to make an appropriate application before the Tribunal. 2. In terms of the above direction of Hon'ble High Court, the present modification application stands moved by the applicant/appellant. 3. The matter had earlier come up on record, when the learned SDR appearing for the Revenue was directed to seek comments by the appropriate authority. On matter being called today, learned SDR produces a letter of Additional Commissioner (Review), dated 3-2-2012 admitting attachment of the property worth Rs. 17 crores. However, it stands pleaded in the said letter that keeping in view the huge amount of Govt. Revenue at stake and as the party does not deserve any leniency in view of fraud committed, the detention of the property be continued so as to safeguard the Govt. Revenue. The appellants be also directed to make pre-deposit of Rs. 6 crores as already ordered vide stay order dated 27-9-2011. 4. Learned Advocate appearing for the applicant submits that the Tribunal has already considered the merits of the case, at the time of disposal of the stay petition and has considered fit to direct the appellant to depos....
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....ed of in the above terms. The compliance is to be reported on........ (Pronounced in the open Court on .........................) Sd/- Archana Wadhwa, Member (Judicial) 7. [Order per : Mathew John, Member (T)]. - I have gone through the order recorded by ld. Member (Judicial). Considering the facts of the case and the financial status of the applicant, I am of the view that there is a danger that the order recorded by Member (Judicial) will only help the applicants to get the attached properties released and thereafter make no deposit at all and vanish. I see only very limited conflict between the attachment notice issued by the Commissioner under Rule 4 of Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 (hereinafter referred to as "the said Rules") and the stay order issued by the Tribunal under Section 35F of the Central Excise Act. Further if such a conflict is there, I am of the view that Tribunal should resolve it only to the extent necessary and should not pass any order which may help the assessee to vanish without payment of any dues at all. So I am recording this separate order. 8. The facts of the case are already....
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.... raise funds. But there was no undertaking during hearing that if attachment is lifted Rs. six crores will be deposited. Such oral undertaking if given also cannot result in collection of the money. The order recorded by Member (Judicial) also does not put adequate conditions to ensure that on lifting of the attachment of all the four properties, Rs. six crores will be deposited. The sequence of events consequent to the order as recorded by Member (J) is likely to be release of properties, its alienation, no pre-deposit and then dismissal of the appeal for non-compliance with the order of pre-deposit. I am of the view that there should be safeguard against such a probable sequence of events detrimental to the interest of Revenue. 13. There is an argument that Revenue cannot ask for any modification of the earlier stay order to make it adverse to the applicant because Revenue has not filed any application for modification. Going by the same logic there is no appeal filed by applicants against the attachment notice and hence the Tribunal cannot rush to pass order on that issue. Such order if passed amounts to treating the two parties before the Tribunal unequally. In my view th....
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....ed in Rule 9 of the said Rules. Revoking the notice for all properties should be considered only after the order for pre-deposit is complied with. To this extent I differ from the order recorded by Member (Judicial). I am also of the view that since the stay order has not taken effect the Revenue should be allowed to complete the process of attachment and its sale to realize Rs. 6 crores. 18. At this stage I would like to bring to the notice of Revenue the fact that if they are relying on the powers under Section 11DDA, the notice issued by them cannot have a life beyond two and a half years that is beyond 11-2-2013, that too if proper extensions have been taken from the Chief Commissioner, in view of the provisions in Section 11DDA of Central Excise Act. The question whether the powers under Section 12 of Central Excise Act read with Section 142 of the Customs Act is available independent of Section 11DDA may be examined by Revenue. The very process of sorting out difference of opinion between the two Members, regarding order to be passed in this modification application, will take sometime and in that process the applicants may get his property released if powers under Sect....
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....nswered that shall serve the purpose of reference. Revenue also agrees to such proposition. 22. At this stage, learned Counsel for the assessee submits that if the property under attachment is released for sale it may fetch crores of rupees and proceeds thereof shall be deposited with Revenue to comply to the interim order. But Revenue submits that on assessment of value of property through Tehsildar it reveals that the value expected to be realized is Rs. 2.3 crores which has been communicated by jurisdictional authority. Such a proposition of the Revenue is yet to be looked into by the learned Counsel for assessee to get further instruction and submit. Revenue is also required to report whether the attached property is either under mortgage or secured against any borrowings by appellant and charge is created thereon. 23. When the aforesaid propositions came up, it was put to the appellant as to what extent of property if made free from attachment can be realised at a short span of time. Assessee replies that it would not take more than 3 to 4 months. But perusal of the difference made in para 19(b) causes problem to understand as to what extent of the property shall f....
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....vernment revenue cannot be trusted to reflect its true financial position in their balance sheet. Further if the pre-deposit of money is delayed further it may not be able to recover the money from the Appellants at all. However, we keep this factor in mind while considering pre-deposit on issues where there can be an arguable case for the Appellants." [Emphasis supplied] 28. Against the stay order dated 27-9-2011 passed by Tribunal the appellant approached Hon'ble High Court of Punjab & Haryana in writ petition No. 23811 of 2011 for consideration of the fact of attachment of appellants' properties by Revenue in terms of their communication dated 12-8-2010 which was not raised before Tribunal earlier while hearing its stay application. The writ petition was disposed by Hon'ble High Court by order dated 21-11-2011 granting liberty to the petitioner to make appropriate application before the Tribunal on or before 29-12-2011 pointing out above fact. It was also directed that if the appellant files an application for the above reason the same be decided in accordance with law and appeal shall not be dismissed for non-compliance of pre-deposit amount till then. 29. In view o....
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..... 2.25 crores, Rs. 2.30 crores, Rs. 8.50 crores and Rs. 4.00 crores totalling to Rs. 17.05 crores. The appellant in the Misc. application stated that the applicants shall not dispose of properties worth at least Rs. 8.00 crores. That warranted an observation by the learned Technical Member to the effect that withdrawal of attachment notice was uncalled for and if at all there is a case for an order of withdrawal, that shall be limited to Rs. 6.00 crores only. Following the decision of Hon'ble High Court of Andhra Pradesh in Chaitanya Educational Committee - 2011 (22) S.T.R. 135 (A.P.) which was upheld by Apex Court reducing the quantum of pre-deposit to a little extent, learned Technical Member was of the opinion that attached properties are not sufficient compliance with Section 35F of the Central Excise Act, 1944. Learned Technical Member further noticed that there was no further undertaking by appellant during hearing that if attachment is lifted Rs. 6.00 crores will be deposited. In Para 15 of the referral order it was specifically recorded by him as under : "Since the applicants state they have no other assets it is very obvious that the amounts due to the government are at s....
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....perty attached was not sufficient to recover the demand. There was no challenge to the notice of attachment before any forum. Therefore, no attachment should be lifted by Tribunal since Misc. Application No. E/M/492/2012 filed on 4-5-2012 in this regard is pending before Tribunal. The District Valuation Officer of Income Tax Department at Chandigarh vide letter dated 18-5-2011 had suggested Revenue that valuation of attached property may be made by Tehsildar. Revenue referred the matter to the Tehsildar who assessed the value of the property at Rs. 2.31 crores as communicated by letters dated 11-11-2011 and 14-11-2011. There was huge discrepancy in valuation made by the assessor M/s. Passi Associates of Jullandhar who valued at Rs. 17 crores while Tehsildar valued at Rs. 2.31 crores. In view of such huge difference, the matter was again referred to income-tax department for advice. When the remedy against attachment lies with the Commissioner (Appeals), Tribunal should restrain to interfere since the aspect of attachment is not under appeal before Tribunal. If the appellant chooses to discharge the amount that shall be directed by stay order it can approach the tax administration t....
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....case of Ketan Parekh - 2012 (275) E.L.T. 3 (S.C.) observed that if a special fact was within the knowledge of the litigant and that was not brought to the notice of the Court that amounts to wilful and deliberate suppression of such facts. When Revenue points out that value of attached properties as per valuation of Tehsildar was not exceeding Rs. 2.31 crores, that certainly causes anxiety to the Revenue in view of huge demand pending recovery from the appellants. In one hand the appellant says in the affidavit that it shall cooperate with Revenue in complying with the conditions of any stay order, on the other it also says that the entire property under attachment may be kept as security with the department till disposal of the appeals. Such averment in the affidavit warrants pre-deposit and making properties free from attachment may jeopardise interest of Revenue. 41. Submission of appellants is that they are facing huge financial crisis. But they have miserably failed to make out a case, which could justify the reasons how properties under attachment shall be adequate to protect interest of Revenue during pendency of appeal when the very attachment proceeding is quite diff....
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....xpressions used in the provisions are "undue hardship to such person" and "safeguard the interests of the 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 interests of the Revenue have to be kept in view. (2) As noted above there are two important expressions in Section 35F. 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 Apex 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. (3) 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 woul....
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.... crores at this stage? (c) Whether it will be appropriate to allow the Revenue to take action to realize Rs. 6 crores by completing the process of attachment and sale of such property? 47. The file was placed before the Hon'ble President for marking the same to third Member. The said file was marked to Shri D.N. Panda, learned Member (Judicial). 48. The file has since been received back by the original Bench for recording of final Majority order. However, on going through order of third Member, it stands recorded in para 39 (now 44) of the order as under:- "39. In view of the material facts as aforesaid came to record demonstrating that Revenue's interest needs protection, Misc. Application No. E/M/492/2012 bringing out material facts is pending before Tribunal and law relating to interim order being well settled by Apex Court, it would be fair to return the reference for passing appropriate order to evolve a working modality at the interim stage as has been held by Apex Court in Dunlop India Judgment (supra) by the referring Bench sitting in Appellate side since various conflicts in opinion are apparent from the referral order when Paras ....