2015 (3) TMI 167 - AT - Central Excise

Application for modification of stay order - Undervaluation of the goods - applicant sold the goods to their two dealers, who are related persons, much lower than the price of the unrelated persons on the same day - Held that - The documents placed by the applicants with the Miscellaneous Application cannot be a basis for modification of the stay order. The balance sheet submitted by the applicant would show huge profit. It is pleaded in the instant application that there is outstanding trade creditors of over ₹ 2.90 Crores whereas the receivables amount to over ₹ 34 Crores. It is also pleaded that the applicant has outstanding loans of over ₹ 49.65 Crores. It is seen from the Balance Sheet that the applicant earned net profit of ₹ 27627962.52. The Ld. Advocate relied upon the decision of the Tribunal in the case of Reliable Poly FIB (I) Ltd. Vs. CCE, Surat 2004 (4) TMI 397 - CESTAT, MUMBAI . He has also placed the decision of the Tribunal in the case of Indotex Machinery Works Vs. Asst. Collector of CE & Others 1986 (1) TMI 114 - HIGH COURT OF JUDICATURE AT MADRAS , whereby it has been held that stay refused once does not operate as res judicata if party renew request for stay by placing necessary material for justification of the interim relief earlier refused. In the present case, we find that the documents placed by the applicant are new evidences, which were not placed before the Commissioner during the adjudication proceedings at any point of time. So, such evidences cannot be accepted in the Application for Modification of the stay order. - However, time period of making pre deposit is extended - Decided partly in favour of assessee.

Summary

Issues: Stay order modification based on under valuation of goods, financial hardship claim, acceptance of new documents as evidence.

Under Valuation of Goods: The applicant sought modification of a stay order requiring a pre-deposit of Rs. 90,00,000 based on confirmed duty demand due to under valuation of goods sold to related persons. The applicant argued that the related persons sold the goods in the market at a lower price than determined by the Adjudicating Authority. The Tribunal noted that the documents supporting this claim were not presented to the Adjudicating Authority initially. The Ld. AR for the Revenue contended that these new documents should be accepted as additional evidence as per CESTAT Procedural Rules.

Financial Hardship Claim: The applicant pleaded financial difficulty, submitting a profit & loss statement and balance sheet ending on 31.03.2014. The applicant highlighted outstanding trade creditors, receivables, and loans, along with a net profit of Rs. 27,62,962.52. The Ld. Advocate cited precedents to support the claim of financial hardship, emphasizing the need for additional evidence to justify the interim relief sought.

Acceptance of New Documents: The Tribunal found that the documents submitted by the applicant with the Miscellaneous Application were new evidence not presented during the adjudication proceedings before the Commissioner. Citing relevant case law, the Tribunal held that such new evidence could not be accepted in the Application for Modification of the stay order. Despite acknowledging the financial hardship claimed by the applicant, the Tribunal extended the compliance period by six weeks, warning that non-compliance would result in dismissal of the appeal.

This judgment delves into the nuances of stay order modification, the requirement for additional evidence, and the consideration of financial hardship in legal proceedings. The Tribunal emphasized the importance of presenting all relevant documents during adjudication and highlighted the significance of adhering to procedural rules in seeking modifications to stay orders.