1984 (11) TMI 212 - AT - Central Excise

Summary

Issues:
1. Grant of stay in respect of fine in lieu of confiscation and penalty under Rule 173Q.
2. Interpretation of provisions of Section 35(F) of The Central Excises & Salt Act, 1944.
3. Exercise of inherent powers for the grant of stay in respect of fine in lieu of confiscation.
4. Determination of financial status and undue hardship for granting stay.

Detailed Analysis:
1. The appellant filed an appeal against an order passed by the Additional Collector of Central Excise, seeking a stay in respect of a fine and penalty. The appellant's advocate requested the court for a stay due to undue hardship, citing previous judgments. The respondent opposed the grant of stay, suggesting a deposit of 50% of the penalty amount. The court considered the arguments and the financial status of the appellant before making a decision.

2. The court examined the provisions of Section 35(F) of The Central Excises & Salt Act, 1944, which empowers the court to grant stay only in respect of duty or penalty. The court noted that the Act does not explicitly allow for stay in the case of redemption fine. Citing previous judgments, the court clarified that inherent powers can be used to grant stay against recovery of fines, but in this case, there was no justification for exercising such powers for the redemption fine.

3. The court referenced previous judgments to establish the scope of its inherent powers to grant stay in certain cases. It highlighted that while inherent powers can be exercised for granting stay against recovery of fines, the appellant's case did not warrant the use of such powers for the redemption fine. The court emphasized the need for proper evidence and justification before invoking inherent powers for granting stay.

4. In determining the financial status and undue hardship faced by the appellant, the court considered the arguments presented by both parties. The court found that the appellant had not provided sufficient evidence of financial hardship regarding the redemption fine. However, in the case of the penalty, the court acknowledged the appellant's genuine plea for undue hardship and directed a specific deposit amount and bank guarantee within a specified timeframe to ensure compliance with the order. Failure to comply would result in the automatic vacation of the stay.

Overall, the judgment delves into the specific legal provisions governing the grant of stay in cases of fines and penalties, the limitations of inherent powers, and the importance of establishing financial hardship to warrant a stay. The court's decision was based on a thorough analysis of the arguments presented and the legal framework governing such matters.