2011 (3) TMI 505 - AT - Central Excise

Waiver of pre-deposit - Non compliance of stay order - clandestine removal - the appellant submits that modification application was also filed before Commissioner (Appeals) pleading financial difficulties, which stands rejected by him - there is no evidence reflecting upon the poor financial condition of the applicant, also note that in cases of clandestine activities the true financial status of an assessee can never be arrived at - As such held that the directions of Commissioner (Appeals) to deposit the amount of Rs.3 lakhs cannot be held to be unjustified - Accordingly direct the applicant M/s. Mark Laminex Pvt. Ltd. to deposit the amount of Rs.3 lakhs within a period of four weeks (period suggested by learned advocate) and report compliance to Commissioner (Appeals)- The impugned orders are accordingly set aside and the matter remanded to Commissioner (Appeals) for fresh decision

Issues:
1. Dismissal of appeal for non-compliance with stay order
2. Financial difficulties and modification application
3. Confirmation of duty on clandestine removal
4. Lack of evidence on poor financial condition
5. Directions for deposit and pre-deposit of penalty
6. Remand of the matter to Commissioner (Appeals)

Issue 1: Dismissal of appeal for non-compliance with stay order
The judgment addresses the dismissal of the appeal by the Commissioner (Appeals) due to non-compliance with the stay order. The appellant was directed to deposit an additional amount of Rs.3 lakhs, on top of the Rs.2 lakhs already deposited during the investigation. The total duty confirmed against the appellant was Rs.9,43,165. The Tribunal found the directions of the Commissioner (Appeals) justified and directed the appellant to comply by depositing the specified amount within four weeks.

Issue 2: Financial difficulties and modification application
The appellant had filed a modification application before the Commissioner (Appeals) citing financial difficulties, which was rejected. The advocate for the appellant, Ms. Avani Mehta, acknowledged the financial difficulty but lacked evidence to establish undue hardship. The Tribunal noted the absence of evidence reflecting the poor financial condition of the appellant. Despite the plea of financial hardship, the Tribunal found the directions for deposit reasonable, especially in cases of clandestine activities where the true financial status is challenging to ascertain.

Issue 3: Confirmation of duty on clandestine removal
The duty was confirmed against the appellant based on findings of clandestine removal of final products and modvat credit on raw materials. The Commissioner (Appeals) directed the deposit of Rs.3 lakhs, representing less than 50% of the confirmed duty, in addition to the already deposited amount. The Tribunal upheld this direction, emphasizing the seriousness of clandestine activities and the need for compliance with financial obligations.

Issue 4: Lack of evidence on poor financial condition
The Tribunal highlighted the lack of evidence regarding the poor financial condition of the appellant. Despite claims of undue financial hardship, the appellant failed to provide substantial proof to support their plea. The advocate struggled to establish the poor financial health of the appellant with concrete evidence, leading to the Tribunal's decision to uphold the deposit requirement.

Issue 5: Directions for deposit and pre-deposit of penalty
While the pre-deposit of penalty was dispensed with for two other appellants, their appeals were dismissed for non-compliance. The Tribunal set aside the impugned orders and remanded the matter to the Commissioner (Appeals) for a fresh decision on merits after ensuring compliance by the appellant. The Tribunal emphasized the importance of meeting financial obligations in legal proceedings.

Issue 6: Remand of the matter to Commissioner (Appeals)
The Tribunal remanded the matter to the Commissioner (Appeals) for a fresh decision on the appeals of the three parties involved, including compliance verification by M/s. Mark Laminex Pvt. Ltd. The Tribunal disposed of the stay petitions and appeals accordingly, emphasizing the need for a thorough review of the case based on compliance with financial directives.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad covers the various issues addressed in the case, including compliance with financial orders, confirmation of duty, lack of evidence on financial conditions, and the remand of the matter for further review.

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