2003 (11) TMI 533 - AT - Central Excise

Stay/Dispensation of pre-deposit - Penalty - Natural justice - HELD THAT - The applicants explanation that the discrepancies in the balance sheets and excise records is due to figures relating to sale of timber, an activity which they say they are involved in does not appear to be prima facie correct in view of the various statements of their own employees. Their contentions that principles of natural justice are violated inasmuch as cross-examination of persons, whose statements are relied upon, has to be weighed in the light of the facts that all the statements relied upon were placed before them. They had all the opportunity to demolish these statements during the proceedings. Cross-examination cannot be claimed as a matter of right in departmental proceedings. Each case has to be examined on its own merits. In regard to the financial hardship claimed, we observe that the audited balance sheet has not been tendered. The claim of the applicants that they have accumulated losses over the years is taken into consideration. The applicants failed to make a strong prima facie case in their favour. We do not consider that this is case fit to waive pre-deposit of duty and penalty completely. M/s. Shivom Ply-N-Wood is ordered to deposit Rs. 50 lakhs towards duty and Rs. 10 lakhs towards penalty, within 12 weeks from today. Upon compliance, further deposit is waived and recovery stayed. If the applicant fails to comply with these orders by 8-3-2004, the appeal will be dismissed without further notice. Compliance by 8-3-2004.

Summary

Issues involved: Application for waiver of pre-deposit of duty and penalties arising from the order of the Commissioner of Central Excise, Aurangabad dated 31-3-2003.

Details of the Judgment:

1. The Commissioner demanded Central Excise duty, imposed penalties, and demanded interest on various individuals associated with M/s. Shivom Ply-N-Wood Pvt. Ltd. under different sections and rules.

2. The department alleged undervaluation and clandestine removal of goods by M/s. Shivom Ply-N-Wood based on balance sheets for multiple years. The applicants' defense regarding the sale of timber was not accepted. Allegations were supported by statements of employees and dealers. The Commissioner found discrepancies in the balance sheets and excise records.

3. The applicants argued that principles of natural justice were not followed, citing lack of cross-examination of witnesses and discrepancies in the evidence. They claimed financial hardship due to losses and closure of their factory.

4. After hearing both sides, the Tribunal noted that the Department's case was based on audited balance sheets. The applicants' explanation regarding timber sales was not considered convincing. The Tribunal found no violation of natural justice and considered the financial hardship claim but did not find a strong case to waive the pre-deposit completely.

5. M/s. Shivom Ply-N-Wood was ordered to deposit Rs. 50 lakhs towards duty and Rs. 10 lakhs towards penalty within 12 weeks, with further deposit waived upon compliance. Non-compliance by 8-3-2004 would result in dismissal of the appeal.

Separate Judgment by Judge:
- No separate judgment was delivered by the judges in this case.