TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 775
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....s. 7,32,368/-, being cenvat credit and, therefore, the total outstanding remained at Rs. 12,96,41,817/- (Twelve crores ninety six lakhs forty one thousand eight hundred seventeen only) and it was further directed that if the appellants deposit the aforesaid amount of Rs. 4 crores & Rs. 10 lakhs, within six weeks then the balance of the disputed demand shall remain stayed till disposal of appeal. 3. Brief facts of the case, as emerging from the face of record, are that the appellants are engaged in manufacturing of M.S. Ingots classified under Chapter-72 of the Central Excise Tariff Act and registered with the Central Excise Department from the year 2004. They are using M.S. Scrap and Sponge Iron, which, after carrying out manufacturing process and deployment of labour, is converted into final product. On the basis of intelligence gathered by the Directorate General of Central Excise Intelligence, Jaipur that the assessee-appellant had indulged in large scale evasion of Central Excise, a search was carried out at the unit of the appellants on 23/12/2009 wherein a 'Panchnama' was drawn and incriminating documents were found and seized by the authorized officers. Simultaneous....
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....appellants evaded central excise duty amounting to Rs. 6,26,62,091/- and held that the said amount is recoverable from the appellants by invoking the proviso to Section 11 A(1)/ 11A(4) of the Central Excise Act, 1944. In addition to the said amount, penalty of like (equal) amount was also imposed and a further amount of Rs. 50 lakhs was imposed as penalty on Shri Sanjay Kumar Agarwal, Director and an amount of Rs. 50,000/- on Shri Arun Kumar, Manager. Thus, a total demand of Rs. 12,96,41,817/- (Twelve crores ninety six lakhs forty one thousand eight hundred seventeen only) was created. 4. Against the said order, the appellants preferred an appeal as also moved an application for waiver of pre-deposit of duty and penalty and grant of stay under Section 35-F of the Central Excise Act before the CESTAT ON 26/04/2013 and the order impugned, as referred to above, was passed by the CESTAT on the said stay application after hearing both the parties directing to deposit an amount of Rs. 4 crores + 10 lakhs as a pre-deposit and subject to deposit of the said amount the appeal would be heard on merits and balance of the disputed demand would be stayed till disposal of appeal by CESTAT. 5. ....
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....ment of the Hon'ble Apex Court in the case of Benara Valves Ltd. Vs. Commissioner of Central Excise, reported in 2006(204) E.L.T. 513 (S.C.) who had an occasion to consider the scope of Section 35-F of the Central Excise Act and while considering undue hardship and safeguarding the interest of revenue, it held that the amount deposited by the appellant in the said case to the tune of Rs. 34 lakhs against Rs. 2,05,31,762/- was sufficient and further directed that the appellant in the said case will not be directed to deposit any other amount over and above the said amount and even directed that the appellant in the said case shall be heard without requiring further deposit. He also relied upon judgment of the Hon'ble Apex Court in the case of Lakshman Exports Limited Vs. Collector of Central Excise, reported in 2002(143) E.L.T. 21 (S.C.); judgment of this Court in the case of PGO Processors Private Limited Vs. Commissioner, C.Ex., reported in 2000(122) E.L.T. 26 (Raj.); judgment of Hon'ble Delhi High Court in the case of Basudev Garg Vs. Commissioner of Customs, reported in 2013(294) E.L.T. 353 (Del.). 6. Shri Ajay Shukla, ld. counsel for the respondent-revenue, on the ....
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.... on record including the order impugned. 8. At the outset, it would be appropriate to refer to Section 35-F of the Central Excise Act which reads as under:- "Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this 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. Provided that where in any particular case, the Commissioner (Appeals) of the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of revenue." 9. Section 35-F of the Central Excise Act contemplates deposit of the duty demanded or the penalty levied pending the appeal filed before the Commissioner (Appeals) or the Appellate Tribunal as the case may be. The word....
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....e pleads the financial hardship for the compliance of pre-deposit and the assessee in fact is unable to pay the pre-deposit amount in reality also, there is no undue hardship as contemplated in the proviso to Section 129E". 12. The Hon'ble Apex Court in the case of Vijay Prakash D. Mehta and Anr. Vs. Collector of Customs (Preventive), Bombay, while considering the provisions of Section 129 of the Customs Act, has held as under:- "These observations cannot be applied to the facts of this case. Here we are concerned with the right given under Section 129A of the Act as controlled by Section 129E of the Act, and that right is with a condition and thus a conditional right. The petitioner in this case has no absolute right of stay. He could obtain stay of realization of tax levied or penalty imposed in an appeal subject to the limitations of Section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardships". That discretion must be exercised on relevant materials, honestly, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by....
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....exercised judicially. 11. The applicable principles have been set out succinctly in Silliguri Municipality and Ors. V. Amalendu Das and Ors. : [1984] 146 ITR 624 (SC), Samarias Trading Co. Pvt. Ltd. V. S. Samuel and Ors. : [1985] 2 SCR 24 and Assistant Collector of Central Excise V. Dunlop India Ltd. : AIR 1985 (SC 330) 12. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public misch....
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..... 17. The above position has been highlighted in Benara Valves Ltd. and Ors. v. Commissioner of Central Excise and Anr. : 2006 ECR 314 (SC). Though the said case related to dispute under the Customs Excise Act, 1944 (in short the 'Excise Act') the parameters are the same. 18. We do not find any infirmity in the order directing deposit of Rupees two crores as affirmed by the High Court. The appellant is granted three months time to deposit the amount fixed by the CESTAT. If it is not deposited within the aforesaid time, the appeal before the CESTAT shall stand dismissed". 14. The Hon'ble Supreme Court in Monotosh Saha Vs. Special Director, Enforcement Directorate and Another reported in 2008 AIR SCW 6004 observed as under:- Two significant expressions used in the provisions are "undue hardship to such person" and "safeguard the realisation of penalty". Therefore, while dealing with the application twin requirements of considerations i.e. Consideration of undue hardship aspect and imposition of conditions to safeguard the realisation of penalty have to be kept in view. 15. Even though the said decision was made while dealing with the order of pre-deposit contemplate....
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.... of justice. No governmental business or for that matter no business of any kind can be run on mere Bank Guarantees. Liquid cash is necessary for the running of a Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance to realise that interim orders ought not to be granted merely because a prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest. We are very sorry to remark that these considerations have not been borne in mind by the High Court and interim order of this magnitude had been granted for the mere asking. The appeal is allowed with costs". 18. The Hon'ble Apex Court again, in the case of Empire Industries Ltd. And ors Vs. Union of India and Ors., reported in AIR 1986 (SC) 662, had in fiscal matters came down heavily on grant of interim orders or in accepting bank guarantee and accordingly observed as under:- "Good deal of arguments were canvassed before us for variation or vacation of the interim orders passe....
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....h orders which have the effect of non-realisation of indirect taxes. This will be healthy for the economy of the country and for the Courts". 19. This court in the case of M/s Savitri Concast Ltd vs. Commissioner of Central Excise and Anr. (DB Excise Appeal No. 39/2012), decided on 21.12.2012 has held as under:- "In similar circumstances, a Co-ordinate Division Bench of this Court also rejected the writ petition, directed against the interim order passed on the stay application, in Shree Cement Ltd. vs. The Commissioner (Appeals-II) & Ors. (supra), decided on 21.02.2012. Order dated 21.02.2012 is also reproduced as under:- "By way of filling this writ petition,interim order dated 29.12.2011 passed by the Commissioner (Appeals-II), Customs & Central Excise under Section 35 F of the Central Excise Act has been questioned. The question involved was that whether the appellants are entitled for credit to the extent of input/input service used in the production of electricity which was not captively consumed for manufacture of final product or for other purpose within the factory but was sold to other different legal entity out of the factory production of appellants as held by ....
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....CESTAT to the appellants. The CESTAT has also considered, while passing the order impugned, about the factors stated by counsel for the appellants and has, prima-facie, come to the conclusion that the respondent had thoroughly analyzed the material recovered from Jai Ambika Dharamkanta, records of Dharamkanta and slips recovered there from, do prove the nexus about the clandestine clearance and removal of the goods made by the appellants in collusion with others and which was based with Dharamkanta weighment slips of goods of the appellants. It has been further observed that even the Director, in the statement recorded under section 14, demonstrated that weighment slip containing details of truck No. RJ05G2289 and RJ21G1014 related to the appellants, which were used for clandestine removal of goods. It has also been observed by the Commissioner/CESTAT that raw material supplied, as appearing in para of the adjudication order also proves that the supplies were not recorded by the appellant and ultimately, the CESTAT has come to the conclusion that prima-facie it appears that a premeditated design was made to defraud the revenue. We are also not convinced with the arguments advanced ....