2002 (12) TMI 333 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand and penalty imposition against M/s. TELCO Ltd.
2. Appeals filed against the order and applications for waiver of pre-deposit.
3. Consideration of financial hardship and modification of stay order.
4. Assessment of prima facie merits for determining pre-deposit amount.
5. Arguments regarding financial hardship and cash profit of the company.

Analysis:
1. The Commissioner of Central Excise confirmed a demand of Rs. 1,54,43,68,025 against M/s. TELCO Ltd. and imposed penalties, leading to appeals and waiver applications. The Tribunal directed M/s. TELCO to deposit Rs. 50 crores for hearing the appeal, while granting unconditional waiver to the officers.

2. Various points were raised in the application and arguments, including the quantification of demand, financial hardship faced by the company, and technical issues. The Tribunal considered the submissions made by both sides and emphasized the assessment of prima facie merits for determining the pre-deposit amount.

3. The company claimed acute financial hardship, supported by the balance sheet for the year ending 31-3-2002. Arguments were made on technical issues by the consultant, maintaining that the cash profit of over Rs. 340 crores indicated no difficulty in payment.

4. The Tribunal, in line with Section 35F of the Central Excise Act, assessed prima facie merits to determine the pre-deposit amount, without delving into every point raised during the hearing. The plea of financial hardship was strongly urged with supporting documentation, referencing relevant case law.

5. After considering the submissions, case law, balance sheet, and final accounts, the Tribunal modified the earlier order. M/s. TELCO Ltd. was directed to deposit Rs. 20 crores in cash and provide a bank guarantee for Rs. 30 crores within 8 weeks. Compliance would result in a waiver of the remaining sums and a stay of recovery during the appeal's pendency. The decision balanced the company's financial situation with the need for a pre-deposit.