2013 (10) TMI 1042 - AT - Central Excise

Benefit of SSI Exemption Notification No.8/2003 Clubbing of clearance - allegation of creation of another dummy company - Waiver of Pre-deposit - Held that - The Commissioner has already confiscated the Indian Currency on the ground that the same are related to sale proceed of goods manufactured and cleared by the applicant for the period from 2003 to 2007 - Prima-facie, the Department could not produce sufficient evidences to link the said currency found in the premises of the appellant to the sale proceeds of goods manufactured and cleared by the applicant, for a long period of four year and spreading from 2003 to 2007 - keeping in view that the total demand of duty lying with the Department, the Applicant is directed to deposit Rs.20.00 lakhs as pre-deposit upon such submission the balance dues against all the applicants would stand waived and its recovery stayed during pendency of the appeals Partial stay granted.

Summary

Issues:
Waiver of predeposit of total duty and penalties imposed under Rule 26 of the Central Excise Rules, 2002.

Analysis:
The case involved the waiver of predeposit of total duty of Rs.2.1 Crores and penalties imposed against the applicant and individuals. The applicant, engaged in manufacturing electrical items, availed SSI exemption. The contention was that two entities, M/s Mica Mold and M/s Mica Mold Pvt. Ltd., were independent units supplying to Indian Railways. The Department raised demands post-search, alleging M/s MMPL as a dummy company. The issue was the clubbing of clearances of both units for SSI exemption eligibility. The ld. Advocate argued against the confiscation of Indian Currency, citing lack of evidence linking it to duty evasion. The ld. A.R. for the Revenue supported the ld. Commissioner's findings on currency confiscation under the Customs Act. The Tribunal found the allegations narrow, focusing on SSI exemption misuse and clandestine removal. The ld. Commissioner had confiscated Indian Currency as proceeds of goods sold by M/s Mica Mold. Lack of evidence linking the currency to duty evasion for 2003-2007 led the Tribunal to direct M/s Mica Mold to deposit Rs.20.00 lakhs within eight weeks for waiver of balance dues and stay on recovery during appeals. Failure to comply would result in dismissal of appeals without notice.