1993 (10) TMI 141 - AT - Central Excise

Summary

Issues:
- Appeal against order of Collector of Central Excise
- Transfer of appeal and stay application to Delhi registry
- Duty and penalty amount disputed
- Prima facie merits and financial hardship arguments
- Interpretation of Central Excise Valuation Rules
- Unit declared as a sick unit
- Pre-deposit of duty and penalty amount
- Observations from previous court decisions
- Request for out of turn hearing

Analysis:

The case involves an appeal filed by M/s. EAP Industries Ltd. against the order of the Collector of Central Excise, Calcutta-II, regarding a disputed duty of Rs. 26,13,964/- and a penalty of Rs. 3 lakhs for the period from April 1, 1986, to August 7, 1989. The appeal, along with a stay application, was initially presented in the Calcutta registry but later transferred to the Delhi registry for convenience as the appellant's advocate was Delhi-based.

The appellant's representative argued for dispensing with the pre-deposit of the duty and penalty amount, citing prima facie merits, financial hardship, and the unit's status as a sick unit covered by the Board for Industrial and Financial Reconstruction (BIFR) order. The representative referred to relevant case laws supporting the appellant's position on merits and financial difficulties, emphasizing the need to protect the appellant's interests due to the sick unit declaration.

On the other hand, the Senior Departmental Representative contended that the resort to the Valuation Rules was unnecessary as the part (I) price list was available, invoking the period of limitation. The Departmental Representative acknowledged the BIFR orders but emphasized the need to protect the revenue's interest in the matter.

After hearing both sides and considering the facts and circumstances, the Tribunal noted the absence of the appellant's price lists on record and the availability of part (I) price lists. Citing relevant case laws and previous court decisions, including observations from the Delhi High Court and the Supreme Court, the Tribunal concluded that the appellant's unit being a sick unit would face undue hardship if required to deposit the duty and penalty amounts. Therefore, the Tribunal dispensed with the pre-deposit requirement, allowing the revenue authorities to pursue recovery proceedings if necessary.

Additionally, the Departmental Representative requested out of turn hearing, leaving the option open for the respondent to make a formal application for such a hearing in accordance with the law.