2014 (1) TMI 423 - AT - Central Excise

Clandestine manufacture and removal of Chakado Rickshaw from the factory premises Waiver of pre-deposit Held that - The evidence which has been relied upon is not only the statement of the proprietor but also of the dealer, who had recorded that they had forwarded the Chakado Rickshaws manufactured by the appellant for registration - for registration of Chakado Rickshaws, RTO authorities insist upon sales invoice of the manufacturer of a particular vehicle - When RTO authorities have specifically stated that they have registered so many numbers of Chakado Rickshaws manufactured by the appellant, the entire issue needs to be gone into detail as to who issues the sales invoices of Chakado Rickshaws and how these Chakado Rickshaws got registered with the RTO authorities - Prima-facie, the appellant has not made out a strong case for complete waiver of pre-deposit of amount the appellant directed to deposit an amount of Rupees fifty lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues: Allegation of clandestine manufacture and removal of 'Chakado Rickshaw'; Violation of principles of natural justice in cross-examination; Financial hardship for depositing the appeal amount.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the appellant filed a stay petition seeking the waiver of pre-deposit of confirmed amounts totaling Rs. 1,68,67,591.00 as duty, interest, penalty, and redemption fine related to the alleged clandestine manufacture and removal of 'Chakado Rickshaw.' The adjudicating authority had confirmed these amounts based on the allegation of clandestine activities. The appellant's counsel argued that there was no independent corroboration of the allegation and highlighted the appellant's registration with ARAI for manufacturing the Rickshaws, emphasizing the lack of evidence of clandestine activities. The counsel also raised concerns about the violation of natural justice due to the lack of cross-examination of relevant witnesses and officers. Additionally, the financial hardship faced by the appellant was stressed, pointing out the closure of the factory and severe financial constraints.

The Additional Commissioner argued that the issue was similar to previous cases where appellants were directed to deposit a percentage of the amount based on incriminating statements. The appellant's admission of clearing a specific number of Rickshaws and utilizing the proceeds for purchases was cited as evidence of clandestine activities. The appellant's counsel referred to a previous case to support the requirement of corroborative evidence for clandestine removal.

After considering the submissions, the Tribunal found that the core issue revolved around the allegation of clandestine removal of Chakado Rickshaws. While the appellant did not dispute the proprietor's statement on clandestine activities, there were discrepancies regarding the retraction of the statement and the lack of independent corroboration. The Tribunal noted the importance of investigating the registration process of the Rickshaws and the issuance of sales invoices for registration. It was decided that a detailed examination of these aspects would be necessary during the final disposal of the appeal.

Ultimately, the Tribunal ruled that the appellant had not presented a strong case for a complete waiver of the pre-deposit amounts. Considering the precedent set in similar cases and the appellant's financial situation, a partial deposit of Rs. 50,00,000/- was ordered within a specified timeframe. The appellant was directed to report compliance, and further proceedings were scheduled based on the compliance report. The application for the waiver of the remaining balance was allowed subject to the specified deposit and compliance.