1994 (7) TMI 134 - AT - Central Excise

Summary

Issues: Clubbing of clearances of two separate entities for denial of exemption, denial of principles of natural justice, financial position of the applicants, and the grant of stay applications.

The judgment pertains to two Stay applications filed concerning a common impugned order by the Collector of Central Excise, New Delhi, requiring the deposit of duty and penalties by two entities. The primary issue revolves around the clubbing of clearances of both units and the denial of exemption based on a relevant notification. The applicants argued that the clubbing was incorrect as the units were separate legal entities managed differently. They contended that the order suffered from deficiencies, including a delay between final hearing and the order, denial of natural justice by not allowing cross-examination of buyers, and exemption denial without specific charges in the show cause notice. The financial position, loss amounts, and balance sheets were also highlighted to support the Stay applications.

The Revenue countered the arguments, stating that the delay in passing the order was justified due to the complexity and evidence volume. They refuted the claim of denial of natural justice, asserting that buyer statements were not the sole basis for the decision and cross-examination was not mandatory in every case. It was alleged that one of the entities was a dummy unit, and evidence suggested clandestine activities, making it challenging to trace hidden income. The Revenue opposed the stay, emphasizing the need for penalty deposit based on the circumstances.

After considering both sides' submissions and reviewing the records, the Tribunal found no prima facie case in favor of the applicants regarding natural justice or merits. While acknowledging the financial position and liquidity of the applicants, the Tribunal noted that absolute stay was not warranted. However, to prevent undue hardship, the Tribunal directed one of the applicants to deposit a portion of the sum within a specified timeframe, while dispensing with the balance of duty and penalties during the appeal's pendency. The decision aimed to balance the interests of justice with the financial circumstances of the parties involved.

In conclusion, the Tribunal's judgment addressed the issues of clubbing clearances, denial of natural justice, financial considerations, and the grant of stay applications. The decision provided a nuanced approach by requiring a partial deposit while considering the overall circumstances and financial positions of the entities involved. The matter was scheduled for compliance reporting after the specified timeframe for the deposit.