2013 (1) TMI 746 - HC - Central Excise

Stay application - Bogus invoices - Issue of invoices without actual receipt of goods - held that - At this stage when appeals are admitted and awaiting final disposal, we are not inclined to make any observations so as to prejudice either side in their contentions. Suffice it to notice that the applicants have made out a strong prima facie case. Considering the material on record and findings of the authorities we are of the opinion that insofar as penalty element imposed against the company/partnership firm and the office bearers/partners is concerned, same is required to be stayed pending the appeals - by partly allowing these applications in all the respective appeals, there shall be stay against the recovery of penalty against the company/partnership firm. However, the remaining portion of the duty and interest thereon is not stayed for which the applicants have time upto 28-2-2013 to deposit. - stay granted.

Summary

Issues:
Stay of impugned judgment of the Tribunal regarding penalty imposition on the company/partnership firm and its office bearers/partners.

Analysis:
The Civil Applications were filed by the assessee seeking a stay of the Tribunal's judgment. The applicant's counsel argued that there was no direct evidence linking the appellants and its office bearers with the actions of Gautam Pal, who admitted to supplying non-duty paid goods to various persons, including the appellants. It was highlighted that there was no evidence to show that the applicants benefited from Gautam Pal's actions. The applicants provided evidence indicating that the ingots were received in their factory and used in the manufacturing process.

On the other hand, the department's counsel opposed the application, stating that the Tribunal had made factual findings and, therefore, no stay should be granted at this stage. Reference was made to the statement recorded from Gautam Pal. However, the Court, while refraining from making observations that could prejudice either side, acknowledged that the applicants had established a strong prima facie case. After considering the material on record and the authorities' findings, the Court decided to stay the penalty element imposed against the company/partnership firm and its office bearers/partners pending the appeals.

As a result, the Court partly allowed the applications, granting a stay against the recovery of the penalty imposed on the company/partnership firm. However, the remaining duty and interest were not stayed, and the applicants were given time until a specified date to make the necessary deposits. The Civil Applications were disposed of, with the rule made absolute to the extent mentioned in the judgment.