1993 (8) TMI 173 - AT - Central Excise

Summary

Issues:
Dispensation of pre-deposit of duty and penalty levied, misdeclaration of Bagasse quantity, financial hardship plea, reliance on private records, discrepancies in records, recovery of outstanding amount, pre-deposit requirement for statutory appeal.

Analysis:
The judgment pertains to applications seeking dispensation of pre-deposit of duty and penalty levied in an impugned order. The applicants were accused of misdeclaring the quantity of Bagasse used to avail benefits under Notification 138/86. The learned Advocate argued that the authorities previously confirmed the correct usage of Bagasse through tests, challenging the current allegations. Financial hardship was pleaded due to the company's sick unit status under B.I.F.R. The Advocate highlighted the recovery of over Rs. 2 crores from outstanding debtors but argued that permission from B.I.F.R. was needed for payments. Reference was made to Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, emphasizing restrictions on recovering amounts from sick units. The Advocate sought waiver of pre-deposit based on financial constraints.

The judgment noted discrepancies in Bagasse records between statutory and private documents, leading to duty demands. The lower authority's order was deemed justified based on evidence, including private records showing manipulated entries. The Managing Director admitted to discrepancies, reinforcing the case against the applicants. Despite the company's rehabilitation status, the recovery of a substantial outstanding amount raised questions about the financial hardship plea. The judgment clarified that statutory appeal rights do not exempt pre-deposit requirements. Consequently, the applicants' company was directed to pre-deposit Rs. 10,00,000 towards duty, with the balance dispensed with pending appeal. For the individual applicants, pre-deposits of Rs. 25,000 and Rs. 10,000 towards penalties were set, with the remaining amounts stayed pending appeals. Non-compliance by the specified date would lead to legal actions, ensuring adherence to the order.

In conclusion, the judgment balanced the applicants' financial challenges with the statutory obligations, requiring pre-deposits for duty and penalties while allowing dispensation for the balance amounts. The decision emphasized the importance of upholding legal procedures despite financial difficulties, ensuring fair treatment while maintaining the integrity of the legal process.