1990 (2) TMI 173 - AT - Central Excise

Summary

Issues: Financial hardship of the applicants, modification of stay order, deposit of duty and penalty, disclosure of assets and liabilities, discretion of the Bench, modification of deposit amount, undertaking to Collector of Central Excise.

In the case before the Appellate Tribunal CEGAT, New Delhi, the applicants had been directed to deposit Rs. 3 lakhs in cash within 8 weeks due to a total duty demand of Rs. 11,75,491.00 and a penalty of Rs. 10 lakhs. The applicants sought modification of the stay order to waive the deposit requirement based on financial hardship. The Tribunal had considered the financial condition of the applicants before issuing the initial order. The applicants' representative had difficulty explaining their financial situation during the hearing. The applicants' financial status was detailed, including secured and unsecured loans, sundry creditors, and assets like Sundry Debtors. The Revenue argued that the applicants, a partnership concern, had not disclosed the partner's assets and liabilities. The Revenue left the decision to the Bench's discretion.

Upon hearing arguments, the applicants offered to deposit Rs. 1 lakh within a month and requested a modification to deposit a total of Rs. 2 lakhs over 8 months. The Tribunal reviewed the balance-sheet details, noting loans obtained, creditors, debtors, and stock details. The Tribunal observed that the closing stock represented raw materials and not finished goods for sale, indicating hardship in raising funds through stock sales. Consequently, the Tribunal modified the deposit requirements. The new directions included depositing Rs. 1 lakh within a month, another Rs. 1 lakh within three months, and providing an undertaking not to dispose of certain assets until the appeal's resolution, satisfying the Collector of Central Excise, Vadodara.