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Issues involved: Modification of stay order, admissibility of modification application, financial hardship considerations, legal principles u/s Section 35-F, inherent powers of Tribunal for modification of stay order.
Modification of Stay Order: The Appellate Tribunal CESTAT AHMEDABAD considered a miscellaneous application filed by M/s. Baheti Metal & Ferro Alloys Limited seeking modification of a stay order. The Tribunal had initially granted a conditional stay requiring a pre-deposit of duty and penalties of Rs. 2.50 crores. The applicant sought modification of the stay order, presenting justifications and legal arguments, including references to relevant case laws supporting their position that LME prices should not be relied upon for determining the value of Aluminium Scrap. The Tribunal carefully evaluated the submissions made by both parties and ultimately modified the stay order, waiving the pre-deposit requirement and instead directing the applicant to pledge their residential bungalow as security. Admissibility of Modification Application: The Tribunal deliberated on the admissibility of the modification application, considering the inherent powers of the Tribunal to ensure justice. Citing legal precedents, including a judgment by the Hon'ble High Court of Bombay, it was established that the Tribunal possesses inherent powers to modify stay orders as necessary to uphold fairness and legality. The Tribunal's decision to modify the stay order was in line with these principles, ensuring that the applicant's financial hardship and genuine intentions were duly considered. Financial Hardship Considerations: The applicant, through their legal representatives, presented detailed evidence of financial hardship, including cash flow problems and incurred losses. They offered their residential property as security, demonstrating their willingness to comply with the Tribunal's directives. The Tribunal carefully assessed the financial situation of the applicant and acknowledged the severe financial transgression they were facing. In light of the financial difficulties faced by the applicant, the Tribunal decided to modify the stay order, taking into account the applicant's genuine circumstances and the substantial amount of revenue involved in the case. Legal Principles u/s Section 35-F: The Tribunal referred to Section 35-F of the Act, emphasizing the twin requirements of considering undue hardship to the applicant and imposing conditions to safeguard the interest of revenue. The Tribunal highlighted the importance of establishing undue hardship, which must be shown to be out of proportion to the requirement itself. By analyzing the legal provisions and relevant case laws, the Tribunal ensured that the modification of the stay order was justified and aligned with the principles set forth in the law. Inherent Powers of Tribunal for Modification of Stay Order: The Tribunal exercised its inherent powers to modify the stay order, taking into consideration the specific facts and circumstances of the case. By carefully evaluating the submissions, case laws, and financial documents presented, the Tribunal concluded that the modification of the stay order, waiving the pre-deposit requirement in favor of pledging the residential property as security, was a justified decision. The Tribunal also set a deadline for compliance and final hearing, emphasizing the unique nature of the case and clarifying that the order should not be considered a precedent.
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