2006 (6) TMI 370 - AT - Central Excise

Summary

Issues:
1. Modification of Stay Order for waiving pre-deposit requirement.
2. Financial hardship and assets erosion concerns.
3. Detention of goods and property for non-compliance.
4. Appeal dismissal due to non-compliance with pre-deposit condition.

Analysis:
1. The application sought modification of the Stay order to waive the pre-deposit requirement due to subsequent events. The Tribunal had earlier rejected the request for waiver after considering financial hardship and the availability of company assets for revenue recovery. The applicant's plea was based on the contention that the Central Excise authorities had taken control of the goods, justifying a modification of the Stay order.

2. The Tribunal, in its detailed order, noted the financial position of the company and the Director, highlighting the unsuccessful attempts to raise loans and the non-operational status of the company for several years. Despite claims of financial distress, the Tribunal was concerned about the possibility of assets being eroded or siphoned away. The decision to reject the waiver was based on the assets available for revenue recovery and the risk of erosion, as highlighted in the balance sheet analysis.

3. The Deputy Commissioner had issued a memorandum-cum-notice of demand, authorizing the detention of excisable goods, raw materials, and plant and machinery due to non-compliance with the pre-deposit requirement. The Superintendent was instructed to detain the goods, but an affidavit later clarified that no goods or property had been attached at that point. The Tribunal emphasized that the non-compliance with the pre-deposit condition led to the dismissal of the appeals, and subsequent processes for execution were deemed necessary.

4. The Tribunal dismissed the application for modification of the Stay order, citing precedents where severe financial constraints or attachment of goods did not warrant waiver of pre-deposit conditions. The decisions of other courts and tribunals were considered, but the Tribunal upheld the original order due to non-compliance and subsequent dismissal of the appeals. The applicants' reliance on past judgments was deemed insufficient to justify a modification in this case.