2015 (1) TMI 714 - HC - Central Excise

Clandestine removal of goods - Penalty u/s 11AC - Held that - Tribunal by its order 2015 (1) TMI 665 - CESTAT NEW DELHI has considered the prima facie case and thereafter, on the basis of the facts and circumstances of the case has ordered the Assessee and Shri Dave to deposit ₹ 70,00,000/- and ₹ 10,00,000/- respectively. There is no illegality in the same. - Tribunal has allowed the application of Shri Goyal on the basis that nothing brought to its notice about the active involvement of Shri Goyal, which is not the case so far as Shri Dave was concerned. There is justification for passing different orders. - Decided against assessee.

Summary

Issues:
Tax appeals against the order of Customs, Excise and Service Tax Appellate Tribunal regarding pre-deposit requirements.

Analysis:
1. Background and Show Cause Notices:
- A search was conducted at M/s. Kailash Traders and M/s. Bajrang Transport, leading to the issuance of a show cause notice to the Assessee for clandestine removal of goods.
- Show cause notices were also issued to the Directors of the Assessee under Rule 26 of the Central Excise Rules, 2002.

2. Adjudication and Appeals:
- The Adjudicating Officer confirmed the notices, imposing excise duty, interest, and penalties on the Assessee and the Directors.
- All three parties filed appeals against the orders, along with applications to waive pre-deposit.

3. Tribunal's Decision on Pre-Deposit:
- The Tribunal directed the Assessee to deposit Rs. 70,00,000 and Shri Dave to deposit Rs. 10,00,000 within specified timelines.
- Shri Goyal's application was fully allowed, exempting him from making any pre-deposit.

4. Legal Challenge and Discrimination Claim:
- The Assessee contended discrimination as Shri Goyal's application was fully allowed while Shri Dave's was only partly allowed.
- The Tribunal justified the differential treatment based on the lack of evidence regarding Shri Goyal's active involvement compared to Shri Dave.

5. Court's Decision and Dismissal:
- The High Court upheld the Tribunal's decision, finding no illegality in the pre-deposit requirements.
- The Court dismissed the tax appeals, granting the appellants two months to deposit the specified amounts.

In conclusion, the High Court dismissed the tax appeals challenging the Tribunal's order on pre-deposit requirements, upholding the differential treatment based on the involvement of the Directors. The Court granted a two-month extension for the deposit of the specified amounts.