2014 (10) TMI 127 - AT - Central Excise

Waiver of the pre-deposit - Denial of rebate claim - Held that - adjudicating authority has recorded that the processors of grey fabrics from whom the appellant had purportedly got the goods processed had clearly indicated that they have not supplied any goods to the appellant and some of the firms were not at all to be found and were either fake / bogus or non-existing firms. appellant had approached one of the broker of textile and sought for only central excise invoices and that also of high value fabrics and in turn agreed to give premium / commission to the tune of 5% to 7% of the value shown in the invoices. - adjudicating authority has recorded detailed findings of the ineligibility of the appellant to claim rebate of duty paid by them on export of goods. As against such a detailed findings, we are of the view that the grounds taken in appeal by the appellant herein needs to be appreciated in depth which can be done only at the time of the final disposal of appeal. - appellant has not made any case for the waiver of the pre-deposit of the amounts involved. At the same time, as the appellant is pleading severe financial hardship, keeping in mind that identically placed appellant Amar Fashions application for waiver of amounts was considered sympathetically and waiver of balance amounts was granted on the ground that said Amar Fashions has deposited an amount of ₹ 50.00 lakhs; we direct the appellant herein to deposit an amount of ₹ 45.00 lakhs for hearing and disposing the appeal on merits - Partial stay granted.

Summary

Issues:
Stay petition for waiver of pre-deposit of duty, interest, and penalties; rejection of rebate claim; confirmation of central excise duty; imposition of penalties; demand of duty jointly and severally; financial hardship plea.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of duty, interest, and penalties confirmed against them. The Tribunal had initially directed the appellant to pre-deposit an amount for hearing the appeal, which was challenged by the appellant in a modification application. The High Court set aside the pre-deposit order and directed a fresh consideration of the stay petition. The appellant argued that they were eligible for rebate on exported fabrics and challenged the joint and several demand of duty. The Departmental Representative contended that the duty was not paid, and transactions were on paper only.

The Tribunal observed that significant duty amounts, penalties, and interest were confirmed against the appellant. Detailed findings revealed discrepancies in the appellant's claims and transactions, including dealings with non-existing firms. The adjudicating authority had imposed penalties for overvalued goods and false representations. The Tribunal noted the complexity of the case and the need for a detailed review during the final appeal disposal.

Regarding the joint and several demand of duty, the Tribunal clarified the liability of the proprietorship firm and the proprietor. The appellant's financial hardship plea was considered, and a partial waiver was granted based on a previous case's sympathetic treatment. The appellant was directed to deposit a specified amount for the appeal's continuation, with a stay on recovery until appeal disposal. Compliance with the deposit deadline was crucial for further proceedings.

In conclusion, the Tribunal found no grounds for a complete waiver of pre-deposit but acknowledged the appellant's financial difficulties. The judgment emphasized the need for detailed examination during the final appeal hearing and provided a structured approach for the appellant's compliance and continuation of the appeal process.