2014 (5) TMI 168 - AT - Central Excise

Restoration of appeal - Waiver of pre deposit - Appeal dismissed for non compliance of pre deposit order - manufacture of M.S. Round / Bars by rolling mills - experiment was conducted by the Revenue and it was found that from the consumption of 1 KWH of electric power 830 kgs. Of finished goods are manufactured - As per the experiment, it was found that the applicant was showing higher consumption of electricity with intent to evade payment of duty - Held that - experiment was conducted in the factory of the applicant in the presence of the applicant, which shows that the applicants are showing higher consumption of electricity than the actual consumption in the manufacture of excisable goods. There is evidence on record to show that the applicants are showing the sale of goods on losses, however, the applicant had given huge amount to traders on loan and received the interest of more than Rs. 36 lakhs in one year - prima facie the applicant has not made out a case for total waiver of pre-deposit of dues. Accordingly, the applicants are directed to pre-deposit 25% of Rs. 2,22,40,449/-the demand confirmed in respect of clandestine clearance of goods within a period of eight weeks. On deposit of the above mentioned amount, pre-deposit of the remaining amount shall stand waived during pendency of the appeal - Following decision of Orange City Alloys Pvt. Ltd. and other 2011 (10) TMI 440 - BOMBAY HIGH COURT - Conditional stay granted.

Summary

Issues:
Application for restoration of appeal and waiver of pre-deposit of dues against adjudication order.

Analysis:
The applicant filed an appeal with an application for waiver of pre-deposit of dues, which was adjourned and ultimately dismissed for non-prosecution. Subsequently, the appeal was dismissed for non-compliance with the stay order condition. The applicant then filed an application for restoration of the stay petition and appeal, depositing the required cost. The Tribunal restored the stay application and appeal, taking into account the deposited cost.

The applicant's appeal involved a demand for total duty, interest, and penalty for the period of January 2004 to September 2009, related to the manufacture of M.S. Round/Bars by rolling mills. The Revenue found discrepancies in electricity consumption and finished goods production, leading to a confirmed demand for suppression of production and denial of SSI exemption. Interest and penalty were also imposed under Section 11A C of the Act.

The applicant argued that the demand was based on assumptions and not sustainable, as they regularly filed returns without objections from the Revenue. The Revenue cited a previous case where the Tribunal directed a deposit for hearing based on electricity consumption grounds. The Hon'ble Bombay High Court's decision in a similar case was referenced to support the requirement for a partial pre-deposit.

The Tribunal found evidence that the applicant misrepresented electricity consumption and sales, while receiving significant interest income. Referring to a previous case, the Tribunal directed the applicant to pre-deposit 25% of the confirmed demand within eight weeks, with the remaining amount waived during the appeal's pendency. Compliance was required by a specified date.

In conclusion, the Tribunal upheld the partial pre-deposit requirement based on the applicant's conduct and previous legal precedents, ensuring fairness and compliance during the appeal process.