2014 (4) TMI 380 - HC - Central Excise

Maintainability of appeal - non compliance of pre deposit order - Clandestine removal of goods - Assessee being director of company - Responsibility of assessee - Held that - findings recorded by the Commissioner shows that at the initial stage, the appellant has admitted that the manufacturing premises was under his control and he was responsible for day-to-day work of the party. Though the appellant has retracted from his earlier statement, but that may be subject matter of adjudication by the Tribunal in the Appeal that whether retraction from earlier statement is acceptable or not - appellant was a Director of the Company and as such in order to substantiate his claim, he would have filed copies of the Profit and Loss Account, his salary statement or the Balancesheet. Tehsildar is not the competent authority to issue such certificate and, therefore, no reliance can be placed on such certificate issued by the Tehsildar, certifying the income of the appellant. Appellant, being the Director of the Company, cannot be absolved from the responsibility of such clandestinely removal of the goods. Prima facie, the material, on record, is against the appellant. The Tribunal, on consideration of entire facts and circumstances, has allowed the application in part and has directed the appellant to deposit a sum of ₹ 7.05 Lakhs, which cannot be said to be unjustified - Time granted to make pre deposit - Decided partly in favour of assessee.

Summary

Issues:
Challenge to order of Customs Excise & Service Tax Appellate Tribunal regarding deposit amount, Director's liability for duty demand and penalty imposition, consideration of Waiver/Stay Application under Section 35-F of the Central Excise Act.

Analysis:
The appellant challenged the Customs Excise & Service Tax Appellate Tribunal's order directing a deposit of Rs.7.05 Lakhs under Section 35-F of the Central Excise Act. The Tribunal had partly allowed the Waiver-cum-Stay Application of the Company, directing a deposit of Rs.30 Lakhs. The appellant, a Director of the Company, contended that the Tribunal unjustly dismissed the appeal due to non-compliance with the deposit order. The High Court remanded the matter back to the Tribunal to decide the Waiver/Stay Application, leading to the impugned order.

The Commissioner imposed a demand of Rs. 2.44 Crores and a penalty of Rs.20 Lakhs on the appellant, holding him responsible for clandestine removal of goods. The Commissioner's findings indicated the appellant's active involvement in illegal activities at the manufacturing premises. Despite the appellant's salary claim of Rs.4,000 per month supported by a Tehsildar's certificate, the Court found the evidence insufficient to establish his income. The Court noted the Company's non-compliance with the Tribunal's order, indicating acceptance of the duty demand. Prima facie, the Court held the appellant accountable for the goods' removal and upheld the Tribunal's decision to deposit Rs.7.05 Lakhs.

The Court declined to interfere but allowed the appellant two months to deposit the amount. Failure to comply would result in the Tribunal deciding the Appeal expeditiously. The judgment disposed of the Appeal with these directions, maintaining the deposit requirement set by the Tribunal.