2014 (1) TMI 1061 - AT - Central Excise

Clandestine manufacture and removal of goods - Waiver of Pre-deposit - Held that - The evidence gathered by the department is not enough to substantiate the case of clandestine removal - Appellant failed to made out a prima facie case in their favour - the assessee offered to made a pre-deposit of Rs. 2,00,000 which is too inadequate to meet the purpose the appellant directed to made a deposit an amount of Rupees Five lakhs as pre-deposit upon such submission rest of the amount to be stayed till the disposal partial stay granted.

Summary

Issues involved:
Stay application for waiver of duty and penalty; Pre-deposit by the assessee; Evidence of clandestine removal; Sufficiency of evidence; Compliance and reporting requirements.

Analysis:
The judgment pertains to a stay application filed by the assessee seeking waiver and stay of duty amounting to Rs. 24,88,770/- along with an equal penalty imposed for a specific period. The assessee had already paid Rs. 15 lakhs during the investigation process. Additionally, an executive of the assessee had pre-deposited the penalty amount as per an interim order. The Tribunal dismissed the stay application of the executive as it was considered infructuous due to the pre-deposit. The Tribunal then proceeded to hear arguments from both sides regarding the demand, which was based on goods allegedly clandestinely manufactured and removed without payment of duty. The department relied on evidence recovered from the premises of the assessee and their buyers to support the claim of clandestine removal. The counsel for the assessee contended that the evidence was insufficient to prove clandestine removal, but the Tribunal was not convinced by this argument.

Furthermore, the Tribunal found no prima facie case for the assessee based on the evidence presented. The counsel offered to make a pre-deposit of Rs. 2,00,000/-, which the Tribunal deemed inadequate for the purpose. Consequently, the Tribunal directed the assessee to pre-deposit an amount of Rs. 5,00,000/- within six weeks and report compliance to the Deputy Registrar by a specified date. The Deputy Registrar was instructed to report to the Bench accordingly. Upon due compliance with the pre-deposit requirement, the Tribunal granted waiver of pre-deposit and stay of recovery concerning the penalty and the remaining duty along with interest.

In conclusion, the judgment highlights the importance of compliance with pre-deposit requirements in stay applications, the assessment of evidence in cases of alleged clandestine activities, and the Tribunal's discretion in determining the adequacy of pre-deposit amounts based on the circumstances of each case.