1997 (5) TMI 136 - AT - Central Excise

Summary

Issues:
- Appeal for waiver of pre-deposits of duty and penalty
- Denial of Modvat credit
- Denial of exemption under Notification No. 26/94 for reel hank
- Issue related to search and seizure
- Prima facie case on merits
- Appellant declared as a sick unit by BIFR
- Merits and demerits of the case
- Grant of absolute stay

Analysis:
The appellants, M/s. Amitabh Textile Mills Ltd., filed 5 appeals seeking waiver of pre-deposits of duty and penalty imposed on them. The duty amounts and penalties to be deposited for the appeal hearings were specified for each case. The appeals were related to the denial of Modvat credit, denial of exemption under Notification No. 26/94 for reel hank, and issues concerning search and seizure. The appellants argued that they had a strong prima facie case on merits in all 5 cases and requested a waiver of pre-deposits. They highlighted that their unit was declared a sick unit by the BIFR, citing significant financial losses incurred over the years.

The appellants' representative referred to the order by BIFR and the audited accounts to support their contention that paying the required amount would cause undue hardship. They cited a relevant case law where stay was granted due to the poor financial condition of the assessee's unit. On the other hand, the Revenue representative contended that the appellants did not have a prima facie case on merits to warrant an absolute stay as requested. After considering the submissions and records, the Tribunal noted that in a previous case involving the appellants, stay was granted due to their unit being declared a sick unit, and the ends of justice would be met with a full waiver of pre-deposit.

The Tribunal referenced a case where the Supreme Court emphasized the consideration of undue hardship to the petitioner in cases involving duty demands or penalties. Considering the significant losses incurred by the appellants and the earlier grant of stay on similar grounds, the Tribunal accepted that requiring payment of the substantial amount would cause undue hardship. Consequently, all 5 stay applications were allowed unconditionally, and the matter was scheduled for early hearing to address the substantial amount involved in the case.