2011 (3) TMI 1096 - AT - Central Excise

Non compliance of stay order - Clandestine removal - Processed fabrics is received without the cover of any Central Excise invoices and without payment of duty of excise - During the course of further investigation, statements of the Director were recorded admitting such clandestine removals - Held that - As the merchant manufacturers, who had sent the grey fabrics also admitted in their statements recorded during the course of investigation having received the processed fabrics without the cover of any Central Excise invoices and without payment of duty of excise - Therefore, find that the appellant have not been able to make out a good prima facie case in their favour so as to dispense with the condition of pre-deposit of duty - Decided against the assessee.

Summary

Issues Involved:
Non-compliance with stay order leading to dismissal of appeal, confirmation of duty on grounds of clandestine removal, direction to deposit duty amount, lack of prima facie case.

Analysis:
The judgment by Appellate Tribunal CESTAT, AHEMDABAD, delivered by Hon'ble Mrs. Archana Wadhwa, Member (Judicial), pertains to an appeal filed by Shri N.G. Gheewala, Consultant, against the dismissal of the appeal by the Commissioner (Appeals) due to non-compliance with a stay order. The Commissioner had directed the appellant to deposit the entire duty amount of Rs. 6,07,675 in accordance with Section 35F of the Central Excise Act, 1944. The duty in question was confirmed by lower authorities based on findings of clandestine removal.

The appellant, engaged in fabric processing, was found with kacha delivery challans during a visit by Central Excise officers, indicating clandestine removal of processed fabrics without duty payment. Statements from the appellant's representative and the Director admitted to such removals. Additionally, merchant manufacturers receiving the processed fabrics acknowledged receiving them without Central Excise invoices or payment of excise duty.

The Tribunal found that the appellant failed to establish a strong prima facie case to waive the pre-deposit condition of duty. Therefore, the appellate authority's decision to direct the appellant to deposit the duty amount was deemed appropriate. The judgment instructed the appellants to comply by depositing the duty amount within eight weeks and report the compliance to the Commissioner (Appeals) for further appeal consideration on merits. The stay petition and appeal were disposed of accordingly.

In conclusion, the judgment emphasized the importance of complying with stay orders and the necessity of establishing a strong case to dispense with pre-deposit requirements in matters concerning duty payments and clandestine removals. The decision highlighted the procedural aspect of depositing duty amounts before appeal consideration and the significance of evidence and statements in determining the merit of the case.