2010 (1) TMI 537 - AT - Central Excise

Stay order - issue of financial hardship to the applicants was not properly considered while deciding the stay - not been able to point out any other material on record which could relate to the claim of the applicants regarding financial hardship - of stay without compliance of requirement of pre-deposit - Compliance period is extended.

Summary

Issues:
1. Consideration of financial hardship in stay applications.

Analysis:
The judgment revolves around the modification of an order dated 20th April, 2009 passed in stay applications E/484 & 485 of 2009. The applicants sought modification based on the ground that the issue of financial hardship was not adequately considered. The advocate for the applicants argued that the financial difficulties were not properly evaluated, citing the Apex Court's decision in a different case as irrelevant to the matter at hand. On the contrary, the learned DR contended that all aspects, including financial difficulties, were duly considered by the Tribunal, referencing another Apex Court decision regarding undue hardship. The applicants' plea for modification was primarily based on the closure of their factory, selling of machinery, and the partner running a small shop due to financial crisis. However, the Tribunal emphasized that mere assertion of financial hardship is insufficient to justify a stay without depositing the amount ordered. The burden to establish undue hardship lies on the applicants, requiring factual data to reveal their financial capacity.

The Tribunal highlighted the need for the applicants to provide detailed information regarding their financial situation to prove undue hardship. Merely stating financial difficulties without substantial evidence is not adequate for a stay without deposit. The judgment underscored that the applicants failed to present any material supporting their claim of financial hardship, leaving it to the Department to verify. The Tribunal emphasized that the applicants' claim should have been supported by factual data at the time of filing the original applications. The judgment reiterated that the burden of proving undue hardship lies with the applicants, and mere assertions without concrete evidence are insufficient.

Regarding the penalty amount, the Tribunal found merit in the applicants' argument that the penalty directed at the partner should not be deposited by the applicant. Thus, the order was modified to exclude the penalty amount imposed on the partner from the total deposit required. The Tribunal concluded that apart from this specific modification, no other changes were warranted. The compliance period was extended until 12th March, 2010, marking the resolution of the applications.