2014 (12) TMI 694 - HC - Central Excise

Waiver of pre deposit - Suppression of production and clandestine clearance of S.S. Billets - Held that - Assessee had suppressed its actual production with a view to clandestinely remove the excisable goods without the payment of excise duty. When the matter had traveled before the Division Bench of this Court in the previous proceedings, the only point which had been urged, as would be evident from the order of the Division Bench, was the issue of financial hardship. Nonetheless, the Tribunal has also considered the prima facie case and has discussed the issue in a considerable amount of detail in various heads including (i) fictitious commission earning; (ii) disproportionate consumption of chrome & clandestine removal of unaccounted finished goods; (iii) falsification of record showing disproportionate consumption of chromium; and, (iv) undervaluation of job worked goods. After considering the case of the assessee the Tribunal has found that there is no reason or justification to grant complete waiver of pre-deposit. We find no substantial question of law that would warrant the Court to interfere since the submission which has been urged on behalf of the assessee essentially requires the Court to re-appreciate the evidentiary material. This is not the scope of the present appeal, which can be entertained only on a substantial question of law. - However, Pre deposit of penalty stands waived.

Summary

Issues:
- Allegations of suppression of production and clandestine clearance of goods to evade central excise duty
- Appeal for waiver of pre-deposit before the Tribunal
- Financial hardship claimed by the assessee
- Consideration of evidentiary material and legal grounds for granting waiver

Allegations of Suppression and Evasion:
The assessee, involved in manufacturing stainless steel products, faced allegations of suppressing production and clandestinely clearing goods to evade central excise duty. A search revealed excessive consumption of Chromium, leading to a duty demand confirmation of Rs. 2.67 crores and penalties imposed on the assessee and its Director. The Tribunal directed the assessee to make a pre-deposit, which was challenged through multiple appeals due to non-compliance.

Appeal for Waiver of Pre-Deposit:
The Tribunal initially directed a pre-deposit, which the assessee contested citing financial hardship and the factory's closure as a sick unit registered before BIFR. Various legal questions were raised regarding the justification for the pre-deposit, including the security interest of revenue, time-barring of demands, and violation of natural justice principles during adjudication.

Financial Hardship and Tribunal's Decision:
The Tribunal, after considering the evidentiary material and legal arguments, found no grounds for complete waiver of pre-deposit. The Court noted the dismissal of the assessee's application before BIFR in a previous case. While upholding most of the Tribunal's decision, the Court waived the pre-deposit requirement of Rs. 10 lakhs imposed on the Director.

Conclusion:
The Court dismissed the appeals due to non-compliance with the pre-deposit order but extended the time for pre-deposit by three weeks to prevent the assessee from losing the right to appeal. The judgment concluded by disposing of the central excise appeals without any costs imposed.

This detailed analysis covers the issues of allegations of suppression and evasion, the appeal for waiver of pre-deposit, the consideration of financial hardship, and the Tribunal's decision based on evidentiary material and legal grounds.