2007 (8) TMI 629 - AT - Central Excise

Summary

Issues:
1. Modification of stay order directing deposit of a specific amount.
2. Contention regarding financial hardship and being a sick unit.
3. Tribunal's power to modify stay order.
4. Requirement of pre-deposit for hearing appeal on merits.

Analysis:

1. The judgment deals with an application for the modification of a stay order requiring the appellant to deposit a specific amount against duty liability and personal penalty. The Tribunal directed the appellant to deposit Rs. 25 lakhs based on the lack of a prima facie case in their favor.

2. The appellant did not challenge the finding of lack of a prima facie case but contended that financial hardship, including being declared a sick unit, was pleaded in the stay petition. The Tribunal considered this argument but emphasized that being a sick unit alone cannot justify dispensation of the pre-deposit requirement.

3. The learned JDR cited a Karnataka High Court decision to argue that the Tribunal lacks the power to modify a stay order. However, the Tribunal, after considering both sides' submissions, decided to expunge a specific line from the order and proceeded to evaluate the financial position of the appellant.

4. The Tribunal reiterated that as per Section 35F, the appellant is generally required to deposit the entire confirmed amount of dues before the appeal can be heard on merits. While acknowledging the financial condition of the appellant, the Tribunal found no justification for further reducing the deposit amount. The Tribunal also noted that the demands were under consideration of the BIFR and allowed a specific time frame for the appellant to deposit the amount.

In conclusion, the modification application was disposed of with the direction for the appellant to deposit Rs. 25 lakhs within a specified period. The judgment clarifies the Tribunal's approach to pre-deposit requirements, considerations for financial hardship, and the limitations on modifying stay orders.