2003 (11) TMI 367 - AT - Central Excise

Summary

Issues:
1. Interim order for waiving pre-deposit of duties and penalties and granting stay of recovery.
2. Enforcement of confiscation of plant and machinery.
3. Application for restraining the department from interfering with manufacturing activity.

Interim Order for Waiving Pre-deposit and Granting Stay:
The appellants had filed a stay application seeking a direction to prevent the department from taking physical possession of the factory. An interim order was passed on 28-10-2003, waiving pre-deposit of duties and penalties and granting a stay of recovery pending the appeals, without expressing any prima facie opinion on the demands. The order was made under Rule 41 of the CEGAT (Procedure) Rules, 1982.

Enforcement of Confiscation of Plant and Machinery:
The jurisdictional Assistant Commissioner of Central Excise and Customs issued a letter on 5-11-2003 instructing the appellants to stop operations of confiscated machinery by 10 am on 6-11-2003 for enforcing the confiscation. The enforcement was based on the order dated 28-10-2003 and the High Court's order of 13-8-2003, which allowed the party to apply to the Tribunal for a stay of the impugned order. The High Court's order stayed the confiscation for eight weeks, provided an undertaking was given not to alienate or encumber the property. Although the stay order was extended, the extended period had expired, and no further steps were taken before the High Court for an extension.

Application for Restraining Department from Interfering with Manufacturing Activity:
The appellants filed a fresh application requesting the department to refrain from interfering with their manufacturing activity. The application was scheduled for disposal on 17-11-2003. The appellants' counsel urged the Tribunal to restrain the department from interfering until the application was resolved. Considering the circumstances, the Tribunal decided that the department should not enforce the confiscation order until the application was disposed of. Rule 41 of the CEGAT (Procedure) Rules, 1982 empowered the Tribunal to issue such an injunction in the interest of justice. Consequently, the respondent was directed not to enforce the confiscation order or disrupt the manufacturing activity until the application was finally resolved by the Bench.

Communication of Order:
The Tribunal directed the D.R. to promptly communicate the order to the jurisdictional Central Excise authorities for compliance with the directive to refrain from enforcing the confiscation of plant and machinery or interfering with the appellants' manufacturing activity.