2009 (4) TMI 640 - AT - Central Excise

Summary

The judgement citation is 2009 (4) TMI 640 - CEST, AHMEDABAD. The case involves an application for modification of a stay order requiring the appellants to deposit 50% of the duty amount demanded. The application was filed by the appellants, who are unable to deposit the required amount due to financial difficulties. The Member (T) of the tribunal, B.S.V. Murthy, rejected the application for modification, stating that the financial crisis and the prima-facie case against the appellants were considered when the original order was passed. The tribunal noted that the Revenue's interest must be safeguarded in cases of clandestine removal. The application for modification was rejected, but the appellants were granted an additional 12 weeks to make the deposit and report compliance by 17-7-2009 in the interest of justice. Shri J.C. Patel represented the appellant, while Shri Manoj Kumar represented the respondent. Dr. Manoj Kumar Rajak, the SDR, submitted that the Revenue's interest must be safeguarded in cases of clandestine removal, and financial difficulties alone cannot be the criterion for modifying the order. He relied on decisions from the Hon'ble Gujarat High Court and the Hon'ble Mumbai High Court to support his contention. The tribunal considered the submissions from both sides and found no new grounds to reconsider the order already passed. The High Court of Gujarat observed that the tribunal had declared the company a sick industrial undertaking due to losses of over 16 Crores, but this was not sufficient grounds to waive the pre-deposit requirement. The tribunal addressed the issue of financial hardship and directed a pre-deposit of 50% of the duty confirmed, leaving out the penalty except for the Director. No modification application was filed on behalf of the Director, but the advocate submitted that it was an omission and they were likely to file it later. The tribunal rejected the applications for modification of the stay order. The High Court also observed that the tribunal had considered a similar case where the petitioner was under detention for 5 years and could not carry on any business. The Hon'ble High Court held that mere inability to make the pre-deposit could not be a ground for staying the pre-deposit. The High Court of Gujarat also observed that the decision of the tribunal that the company had been declared a sick industrial undertaking due to losses of over 16 Crores was not sufficient grounds to waive the pre-deposit requirement. The High Court also observed that the tribunal had addressed the issue of financial hardship and had directed a pre-deposit of 50% of the duty demand. In the present case, the requirement of pre-deposit was only to the extent of 50% of the duty confirmed, and the penalty had been left out entirely except for the Director. No modification application had been filed on behalf of the Director, but the advocate submitted that it was an omission and they were likely to file it later. The applications for modification of the stay order were rejected. However, the appellants were given an additional 12 weeks to make the deposit and report compliance by 17-7-2009 in the interest of justice. The order was dictated and pronounced in court.