2006 (9) TMI 392 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of penalty

Detailed Analysis:

Issue 1: Application for Waiver of Pre-Deposit of Penalty
The judgment pertains to an application for waiver of pre-deposit of penalty amounting to Rs. 1,90,47,142 imposed on the applicants for habitual default in duty payment. The show cause notice invoked Rule 25(1)(a)(d), which provides for penalties for contravention of Central Excise Rules or Notifications. The applicants argued that Rule 8(3) during the relevant period deemed goods cleared without payment if duty and interest were outstanding. The Tribunal found this argument contentious, stating no strong prima facie case for total waiver was made. Considering financial hardship evidenced by the company's status as a Sick Industrial Unit and heavy losses, the Tribunal directed a pre-deposit of Rs. 10,00,000 within eight weeks, with the balance waived pending appeal.

Conclusion:
The judgment addresses the application for waiver of pre-deposit of a substantial penalty imposed on the applicants for habitual default in duty payment. The Tribunal considered legal provisions, the applicants' arguments regarding Rule 8(3), and their financial hardship before directing a partial pre-deposit and waiving the balance pending appeal. Compliance with the directive was mandated, failing which could result in vacation of stay and dismissal of the appeal.