2004 (4) TMI 449 - AT - Central Excise

Summary

Issues:
Allegation of clandestine manufacturing and removal of goods without payment of duty, maintaining multiple sets of invoices, financial hardship leading to inability to pre-deposit required amount.

Allegation of Clandestine Manufacturing and Removal of Goods without Payment of Duty:
The appellants were accused of clearing PVC pipes as PVC scrap to evade duty, clandestinely manufacturing and removing PVC pipes without duty payment, and maintaining multiple sets of invoices without duty payment particulars. The department's investigation confirmed these allegations, leading to demands, penalties, and personal penalties on the Managing Director for involvement in under-valuation and clandestine removal of goods.

Financial Hardship and Inability to Pre-Deposit:
The appellants claimed financial hardship, stating the company's closure due to financial problems and a bank notice for recovery of a substantial amount. They requested a full waiver of pre-deposit due to their inability to pay. The department opposed this, emphasizing the need to safeguard revenue interests, especially as the appellants had allegedly cleared goods without duty payment. The tribunal considered the circumstances, noting the prolonged adjournments and the prima facie evidence of clandestine activities. Despite the financial difficulties, the tribunal directed the main party to pre-deposit Rs. 50 lakhs and the Managing Director to pre-deposit Rs. 1 lakh within three months. Failure to comply would result in dismissal of the appeal for non-compliance.

In conclusion, the judgment upheld the demands and penalties related to clandestine activities, while also addressing the appellants' financial hardship by requiring partial pre-deposit to proceed with the appeals. The decision balanced the need to safeguard revenue with the appellants' circumstances, emphasizing compliance with pre-deposit requirements to avoid dismissal under the relevant legal provisions.