2016 (11) TMI 296 - AT - Central Excise

Demand of pre-deposit - jurisdiction of the tribunal - Held that - The appellant-company is a sick company and further operating agency have been appointed on 15-9-2015 by BIFR and feasibility study is under progress. Accordingly, we modify the earlier stay order and grant full stay of the adjudication dues including interest and penalty till disposal of the appeal. Further, it appears that the issue is apparently covered by the Ruling of Hon ble Supreme Court in the case of Moti Laminates Pvt. Ltd. reported in (1995 (2) TMI 67 - SUPREME COURT OF INDIA ), we direct the registry to list the appeal for final hearing in the month of March/April, 2016. Notice to be issued to all the appellants as appeared in the stay order dated 28-5-2014. Also considered the submissions on the question of jurisdiction of this Tribunal pursuant to bifurcation and creation of this Bench and in view of the separate Commissionerate constituted at Dehradun in the State of Uttarakhand. We are satisfied that jurisdiction of the Tribunal is to be determined with respect to the first adjudication order passed by Central Excise authority. As the first adjudication order in this case have been passed by the Central Excise authority at Meerut, accordingly we hold that this Tribunal has got jurisdiction to hear this appeal.

Summary

Issues:
1. Modification of stay order for pre-deposit amount.
2. Consideration of appellant as a sick industrial company.
3. Jurisdiction of the Tribunal based on the location of the first adjudication order.

Analysis:
1. The appellant, M/s. Shirdi Industries Ltd., filed a miscellaneous application seeking modification of a stay order directing a pre-deposit of Rs. 1.5 crores against an adjudicated demand of Rs. 14,23,18,197. The duty was levied on the ground that the appellants, located in Uttaranchal, availed duty exemption under Notification No. 15/2003-C.E. The appellant's products were used captively for manufacturing decorative plywood laminates, and duty was levied as the products were not covered by hill area exemption. The High Court observed the appellant as a sick industrial company under the "sick industrial company" Act, 1985, directing a fresh application consideration before the Tribunal. The Tribunal, considering the BIFR order accepting the appellant as a sick company, modified the stay order granting full stay of adjudication dues, interest, and penalty till appeal disposal. The matter was listed for final hearing in March/April 2016 based on the Supreme Court's ruling in the case of Moti Laminates Pvt. Ltd.

2. The BIFR accepted the appellant as a sick industrial company, appointing SBI as the operating agent for viability study and revival. The appellant's net worth was negative as per the Chartered Accountant's Certificate. The Tribunal acknowledged the appellant's status as a sick company and the ongoing feasibility study. Consequently, the Tribunal granted full stay on adjudication dues, interest, and penalty till appeal resolution, citing the relevance of the Supreme Court's ruling in the Moti Laminates case.

3. The Tribunal also addressed the question of jurisdiction concerning the bifurcation and creation of a bench in Dehradun, Uttarakhand. The Tribunal determined its jurisdiction based on the location of the first adjudication order issued by the Central Excise authority in Meerut. As the first order originated from Meerut, the Tribunal held jurisdiction to hear the appeal, ensuring clarity on the Tribunal's authority in the matter.