2009 (6) TMI 817 - AT - Central Excise

Summary

Issues involved: Application for modification of stay order regarding pre-deposit amount against duty demand and penalty.

Details of the judgment:

1. The application for modification of stay order was filed by M/s. Shree Nathji Industries regarding the pre-deposit amount of Rs. one crore against duty demand of nearly Rs. 5 crores and penalty of equal amount.

2. The appellant's advocate, Shri W. Christian, argued that even if the demand is upheld, the appellant would be entitled to Cenvat credit of duty amounting to Rs. 2.49 crores, which is 50% of the duty demanded. He mentioned that this aspect was not considered by the Original Adjudicating Authority. The advocate also pointed out that the appellant's prayer for cum-duty benefit was not considered. He admitted his oversight in not mentioning the Cenvat credit aspect during the stay petition arguments and requested for modification. Additionally, he stated that the appellant had paid Rs. 15 lakhs in instalments and requested a reduction in the pre-deposit amount due to the availability of Cenvat credit.

3. The Tribunal, after considering the submissions, acknowledged the advocate's mistake in omitting the Cenvat credit availability and the impact on the appellant. Recognizing the appellant as a Small Scale Industries (SSI) unit with limited resources, the Tribunal decided to modify the stay order. The Tribunal reduced the required deposit amount to Rs. 50 lakhs, considering the potential 50% reduction in total duty liability. The appellants were directed to deposit the revised amount within 8 weeks and report compliance by 27th August 2009.

Conclusion: The Tribunal modified the stay order, reducing the pre-deposit amount based on the availability of Cenvat credit and the advocate's oversight during the initial arguments.