2011 (2) TMI 1453 - AT - Central Excise

Summary

Issues Involved: Application to dispense with pre-deposit of duty and penalty confirmed against M/s. Explosion Proof Electrical Control and other appellants, based on allegations of clandestine activities and evasion of duty.

Details of the Judgment:

1. The investigation conducted against M/s. Explosion Proof Electrical Control revealed incriminating documents seized from their factory premises in Silvasa and another factory in Vapi, indicating clandestine manufacture and clearance of electrical equipment under false invoices of dummy units.

2. Statements of various individuals, including buyers, supported the view that the appellants were involved in clandestine activities, clearing goods through dummy units without actual manufacturing facilities.

3. Show cause notice dated 17.10.2008 proposed duty confirmation of &8377; 1,60,43,273/- and identical penalties, leading to the impugned order by the Commissioner.

4. The confirmation of duty was based on scrutiny of recovered records, including invoice books from the manufacturing unit, showing sales through dummy units. Statements and admissions further corroborated the clandestine activities.

5. The Tribunal found that the evidence collected by the Revenue during investigations needed detailed examination at the final disposal stage. The appellants failed to demonstrate a prima facie case or financial hardship to unconditionally allow the stay petition.

6. Despite submitting a balance sheet, the Tribunal concluded that the financial condition of the appellants could not be accurately assessed due to clandestine activities not reflected in statutory records.

7. As a result, the Tribunal directed M/s. Explosion Proof Electrical Control to deposit 50% of the duty amounting to &8377; 80 Lakhs within 12 weeks, in addition to the already deposited &8377; 14.50 Lakhs. Upon compliance, the pre-deposit of the remaining duty and penalties for all appellants was dispensed with, and recovery stayed during the appeal's pendency.

(Separate Judgment by Judges: None)