2014 (4) TMI 183 - AT - Central Excise

Waiver of pre deposit of penalty - Clandestine manufacture and removal of final product - Held that - The company manufacturing final product and evading duty on the finding of clandestine removal has already been sold. The appellants have not made out a prima facie case so as to dispense with the condition of pre-deposit. Though we agree that recovery is required to be made against the company and the said fact cannot be made the basis for deciding the quantum of penalty on the present Director but we find that the adjudicating authority has discussed and has taken into consideration ample evidence for imposing penalty. As such we note that there is evidence in the shape of statement of various persons which reflect upon the role played by the Director. We also agree with the ld. A.R. for Revenue that financial status of the present applicant has not been fully & correctly revealed by him. The same is only as regards the present scenario and there is nothing to show about his earning as the Director of the company - Conditional stay granted.

Summary

Issues:
1. Dismissal of appeals for non-compliance due to non-deposit by the company.
2. Challenge of the dismissal order before the High Court and subsequent directions.
3. Application to dispense with the pre-deposit condition of penalty.
4. Arguments regarding retracted statements, financial difficulties, and imposition of penalty.
5. Consideration of evidence, financial status, and decision on penalty amount.

Issue 1: Dismissal of appeals for non-compliance
The Commissioner confirmed a duty demand and penalty against a company and its Director. The company failed to deposit the directed amount, resulting in the dismissal of both appeals. The High Court observed that the dismissal was unjust regarding the Director and directed the Tribunal to restore the Director's stay petition independently.

Issue 2: Challenge before the High Court and directions
The High Court directed the Tribunal to restore the Director's stay petition, emphasizing that the appeal dismissal for non-deposit by the Director was unfair. The stay petition was restored and listed for disposal separately from the company's appeal.

Issue 3: Application to dispense with pre-deposit condition
The Director sought to dispense with the pre-deposit condition of a penalty imposed on him. The allegations against the company involved clandestine activities, and the penalty was based on statements and evidence indicating the Director's involvement in evading duty.

Issue 4: Arguments and submissions
The Director's advocate argued that the Director's statement was retracted, and reliance on un-cross-examined statements was improper. The company's closure and the Director's financial difficulties were highlighted to request an unconditional stay.

Issue 5: Consideration of evidence and decision on penalty amount
The Revenue argued for the penalty deposit, citing evidence of the Director's involvement in duty evasion. The Tribunal found evidence supporting the penalty imposition and noted the Director's undisclosed financial status. Considering the circumstances, the Tribunal directed the Director to deposit a reduced sum within a specified time, waiving the balance penalty upon compliance.

This judgment addresses issues related to appeal dismissal, restoration of stay petition, penalty imposition, evidence evaluation, and financial status assessment. The Tribunal balanced the need for penalty deposit with the Director's circumstances, ultimately directing a reduced deposit amount based on the evidence and overall case evaluation.