1995 (8) TMI 143 - AT - Central Excise

Summary

Issues:
- Dispensation of mandatory pre-deposit of duty demanded under Section 11D of the Central Excises and Salt Act, 1944 based on Exemption Notification Nos. 130/83 and 131/83.
- Interpretation of Section 11D with retrospective or prospective effect.
- Financial position of the appellants based on the Tentative profit and loss account for the year 1994-95.

Analysis:
The judgment concerns four applications seeking dispensation of the mandatory pre-deposit of duty demanded under Section 11D of the Central Excises and Salt Act, 1944. The demand was raised on the basis that the appellants had availed of exemption from excise duties under Exemption Notification Nos. 130/83 and 131/83 but recovered the same from customers at a higher rate of duty. The appellants argued that the demand was similar to a previous case and questioned whether Section 11D applied to their situation, which related to a period before September 1991. The financial position of the appellants was a key consideration, with the Tribunal examining the Tentative profit and loss account for the year 1994-95. The appellants were directed to execute an undertaking not to alienate fixed assets corresponding to the duty amount in dispute. The Tribunal noted the sales figures and provision for depreciation in the profit and loss account, concluding that the appellants' liquidity position was sound. Consequently, the Tribunal ordered the appellants to deposit Rs. 10 lakhs within eight weeks, with the balance amount deemed waived upon compliance.

The judgment delves into the interpretation of Section 11D, which was inserted by the Central Excises and Customs Laws (Amendment) Act, 1991. Section 11D mandates that excise duties collected from buyers must be paid to the Central Government. The Tribunal considered whether Section 11D had a retrospective effect, noting that Section 11B had been amended to have retrospective application. The financial position of the appellants, as evidenced by the profit and loss account, was a crucial factor in determining the applicability of Section 11D in their case. Despite earlier claims of carried forward losses, the Tribunal relied on the latest profit and loss account for the year 1994-95 to assess the appellants' liquidity position. The judgment highlights the Apex Court's ruling on the retrospective effect of Section 11B, which informed the Tribunal's analysis of Section 11D's application in the present case.

In conclusion, the judgment carefully examines the financial position of the appellants, the applicability of Section 11D with respect to exemption notifications, and the retrospective or prospective effect of the relevant statutory provisions. By assessing the Tentative profit and loss account for the year 1994-95 and considering the sales figures and depreciation provisions, the Tribunal made a decision based on the soundness of the appellants' liquidity position. The order for the appellants to deposit a specified amount within a set timeframe reflects a nuanced approach balancing legal requirements and financial considerations.