1989 (9) TMI 225 - AT - Central Excise

Issues:
1. Appeal against order of Collector of Central Excise
2. Stay application for duty and penalty amounts
3. Marketability of repaired goods
4. Financial hardship and balance-sheet submission
5. Limitation period for demand of duty
6. Opposition to stay application by respondent
7. Pre-deposit conditions and payment schedule

Issue 1: Appeal against order of Collector of Central Excise
The case involves an appeal filed by M/s. Eastern Coils Pvt. Ltd. against an order by the Collector of Central Excise, Calcutta. The appeal was based on the contention that the repaired armatures and mica segments were not marketable goods, and the financial burden of the duty and penalty amounts would lead to undue hardship and business closure. The appellant sought a stay on the duty and penalty amounts.

Issue 2: Stay application for duty and penalty amounts
The appellant, represented by Shri N. Mookherjee, requested the Tribunal to dispense with the duty amount of Rs. 53,99,058.60 and penalty amount of Rs. 10,000. The financial hardship was emphasized, and reference was made to the need for balance-sheets, which were not available at the time. The Tribunal considered the financial position and agreed to a pre-deposit condition for Rs. 10,00,000 to be paid in five monthly installments.

Issue 3: Marketability of repaired goods
The marketability of the repaired armatures and mica segments was a crucial aspect of the case. The argument was based on the principle that non-marketable goods may not be dutiable. Reference was made to a Supreme Court judgment emphasizing that marketability determines dutiability, and simply being listed in the Tariff Schedule does not automatically make a product dutiable. The Tribunal analyzed the marketability of the repaired goods and considered the lack of evidence of marketability.

Issue 4: Financial hardship and balance-sheet submission
The appellant argued financial hardship due to the duty and penalty amounts, stating that payment would lead to business closure. The absence of balance-sheets was noted, and a request for adjournment to submit them was denied by the Tribunal. The appellant offered to pay Rs. 5,00,000, but the Tribunal set a pre-deposit condition for Rs. 10,00,000 to be paid in installments.

Issue 5: Limitation period for demand of duty
The limitation period for the demand of duty was discussed, with reference to a Supreme Court judgment that highlighted the necessity of establishing fraud or suppression of facts to extend the period beyond six months. The Tribunal considered the facts of the case and concluded that the demand should be limited to within six months, as there was no evidence of deliberate withholding of information.

Issue 6: Opposition to stay application by respondent
The respondent, represented by Shri K.D. Tayal, opposed the grant of stay, citing suppression of facts and the lack of a Central Excise License by the appellants. The respondent argued against the stay application and for the rejection of the same.

Issue 7: Pre-deposit conditions and payment schedule
The Tribunal, after considering the financial position and arguments presented, dispensed with the pre-deposit of the full duty and penalty amounts. Instead, a pre-deposit condition of Rs. 10,00,000 was set, to be paid in five monthly installments. The appellants were directed to report compliance of the payment to the Registry, with restrictions on alienating fixed assets without permission during the appeal's pendency.

This detailed analysis covers the various issues involved in the legal judgment delivered by the Appellate Tribunal CEGAT, New Delhi, highlighting the arguments, references to legal precedents, financial considerations, and the decision regarding the pre-deposit conditions and payment schedule.

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