2001 (8) TMI 484 - AT - Central Excise

Summary

Issues: Stay application for waiver of duty demand and penalty, violation of principles of natural justice, claim for abatement of duty, financial hardship of the appellants.

Stay Application for Waiver of Duty Demand and Penalty:
The appellants filed a stay application seeking total waiver of pre-deposit of duty demand of Rs. 55,51,685 and an equal amount of penalty confirmed under relevant rules. The Counsel argued that the impugned order violated principles of natural justice as the appellants were not given a proper opportunity to contest the case. He also highlighted the financial hardship faced by the appellants due to losses incurred, requesting a total waiver of duty and penalty amount. On the contrary, the SDR contended that the appellants had opportunities but adopted delaying tactics. The SDR argued against waiving the duty and penalty, stating that the financial hardship was self-created by the appellants.

Violation of Principles of Natural Justice:
The Tribunal noted that the appellants did not file a reply to the show cause notice, and despite being granted a personal hearing, they failed to appear on the adjourned date without a sufficient cause. The Commissioner considered a letter from the appellants regarding the factory closure and other issues. The Tribunal concluded that there was no prima facie breach of natural justice as the appellants failed to appear in person, and only sent a letter without valid reasons. The Tribunal held that the appellants cannot claim a violation of natural justice when they themselves did not actively participate in the proceedings.

Claim for Abatement of Duty:
The Counsel argued that no abatement was allowed for the closure of the factory, citing a Tribunal decision. However, the Tribunal refrained from expressing an opinion on the validity of the cited law. It emphasized the need for documentary evidence to prove factory closure for claiming abatement. As no evidence was presented by the appellants regarding the closure period, the Commissioner rightly rejected the abatement claim.

Financial Hardship of the Appellants:
The Counsel stressed the financial difficulties faced by the appellants, including the takeover of their factory by a financial corporation and substantial losses incurred. The Tribunal noted the balance sheet provided but highlighted the lack of certification by a Chartered Accountant. It emphasized the legal duty of the appellants to clear Excise dues and upheld the duty demand as not illegal. The Tribunal found no prima facie case for waiving the duty pre-deposit, considering the equity and balance of convenience.

In conclusion, the Tribunal directed the appellants to make a pre-deposit of the entire duty amount within a specified timeline, with the waiver of the penalty amount upon compliance. Failure to adhere to the order would result in the appeal being liable for dismissal under the relevant Act, with a compliance reporting date set.