2009 (1) TMI 775 - AT - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the Commissioner.
2. Liquidation status of Subhtex India Ltd.
3. Basis of Revenue's case and evidence.
4. Principles of natural justice.
5. Financial hardship and pre-deposit requirements.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissioner:
The appellant raised the issue that the order was passed without jurisdiction. The Revenue submitted a letter from the Additional Commissioner, Daman Commissionerate, confirming that the unit M/s. Subhtex (I) Pvt. Ltd. falls under the jurisdiction of the Daman Commissionerate. The Tribunal overruled the preliminary objection based on this confirmation.

2. Liquidation Status of Subhtex India Ltd.:
It was brought to the Tribunal's notice that Subhtex India Ltd. had gone into liquidation and a liquidator had been appointed. Since no notice was given to the liquidator, the Tribunal directed the concerned Commissioner to inform the liquidator about the pendency of the appeal and the existence of the adjudication order. The liquidator was to decide whether to pursue the appeal or not.

3. Basis of Revenue's Case and Evidence:
The Revenue's case was primarily based on daily stock reports and delivery challans submitted by Shri R.S. Gupta. The appellants argued that these documents were not recovered during any panchanama or mentioned in any statements. They also contended that there was no indication of who maintained these documents and that the person responsible was not made available for cross-examination. The Tribunal noted that the daily stock reports showed discrepancies in the quantities of Polyester Texturised Yarn supplied to Samarpan Textiles and Bee Gee Leasing, leading to the demand for differential duty.

4. Principles of Natural Justice:
The appellants claimed a violation of natural justice as the covering letter of Shri R.S. Gupta was not provided, and the clerk who maintained the daily stock reports was not produced for cross-examination. The Tribunal observed that the Department made efforts to provide documents and that only the covering letter of Shri R.S. Gupta was not provided. The Tribunal held that the claim of non-observance of principles of natural justice could not be upheld as the adverse effect of the missing letter on the appellant's defense was not clearly explained.

5. Financial Hardship and Pre-deposit Requirements:
The appellants pleaded financial hardship and requested an unconditional stay against recovery. The Tribunal noted that all the units involved were Private Limited Companies and questioned the whereabouts of earnings from unaccounted transactions. The Tribunal directed the appellants to make a pre-deposit of 50% of the duty demanded for each company within 10 weeks and report compliance. The recovery of the balance amount of duties, penalties, and interest would be stayed during the pendency of the appeal.

Conclusion:
The Tribunal directed the appellants to make pre-deposits and report compliance while staying the recovery of the balance amounts during the appeal's pendency. The case of M/s. Subhakti Textiles and its MD, Shri Vinay Podar, was to be listed again for consideration of the stay application as they were unrepresented this time. The judgment was pronounced on 6-1-2009.