2014 (5) TMI 299 - HC - Central Excise

Waiver of pre-deposit - Tribunal has directed the appellants to deposit 25% of duty demand - allegation of clandestine removal - estimation of value of clearance - Held that - Hon ble the Apex Court in Indu Nissan Oxo Chemicals Ind. Ltd. v. Union of India (UOI) and Ors. 2007 (12) TMI 220 - SUPREME COURT OF INDIA , considering the matter relating to waiver of deposit of amount or pre-deposit of demand during pendency of the appeal relating to the Customs Act, 1962 and considering the plea of financial hardship and balance of convenience, held that even if there is financial hardship, the same cannot be a ground to dispense with pre-deposit amount and balance of convenience is not in favour of appellant. - no merit in any of the appeals and the same are, accordingly, dismissed - Decided against the assessee.

Summary

Issues Involved:
1. Legality of the interim order passed by the Customs, Excise & Service Tax Appellate Tribunal.
2. Validity of duty demand based on average electricity consumption.
3. Connection of the present case with similar cases and precedent judgments.
4. Financial hardship and balance of convenience in pre-deposit requirements.

Issue-wise Detailed Analysis:

1. Legality of the Interim Order:
The appeals challenge the interim order passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, which directed the appellants to deposit 25% of the duty demand and stayed the recovery of the remaining amount. The appellant argued that once an interim order for deposit was passed on 29-11-2011, the Tribunal should not have issued a further order on 23-10-2012. However, the court found that the interim order was passed during the pendency of the stay application and was justified due to the delay in hearing the stay application. Thus, the Tribunal was within its jurisdiction to pass the final order on the stay application.

2. Validity of Duty Demand Based on Average Electricity Consumption:
The appellant contended that the duty demand was based solely on the assumption of average electricity consumption, which is not a valid basis for raising the demand. However, the court noted that there were additional evidences, such as documents recovered from M/S. Shree Sharma Steel Rolling Mills Pvt. Ltd. (SSSRM), indicating that the appellant was making clearances without payment of duty and without issuing invoices. These evidences included discrepancies in the quantity of M.S. Ingots supplied and invoices issued. Therefore, the court found that the duty demand was not solely based on electricity consumption but supported by other substantial evidence.

3. Connection with Similar Cases and Precedent Judgments:
The case was substantially connected with the case of M/S. Shree Sharma Steel Rolling Mills Pvt. Ltd. & Others v. Union of India & Others, where similar facts and duty demands were involved. In that case, the writ petition and subsequent appeals were dismissed by the High Court and the Supreme Court. The court also referred to a similar case, Shree Cement Limited v. The Commissioner (Appeals-II) & Ors., where the writ petition against an interim order was dismissed. These precedents supported the dismissal of the present appeals, as the facts and legal issues were substantially similar.

4. Financial Hardship and Balance of Convenience in Pre-deposit Requirements:
The appellant argued that the duty demand caused financial hardship and should be waived. However, the court referred to the Supreme Court's judgment in Indu Nissan Oxo Chemicals Ind. Ltd. v. Union of India, which held that financial hardship alone is not sufficient to dispense with the pre-deposit requirement. The court emphasized that the balance of convenience and safeguarding the interests of revenue are crucial considerations. Therefore, the court found no merit in the appellants' argument for waiving the pre-deposit requirement.

Conclusion:
The appeals were dismissed, and the court upheld the Tribunal's order directing the appellants to deposit 25% of the duty demand. The court granted the appellants two months to comply with the deposit requirement. The observations made in the judgment would not prejudice the appellants' arguments during the final hearing before the Appellate Tribunal.