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2014 (7) TMI 231 - AT - Central ExciseWaiver of pre deposit - appellants, submits that in view of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, the appellant need not deposit the amount, as ordered by the Tribunal, as protection is available to the appellant under the said provision. - duty of waste and scrap generated during the course of manufacture of wires and cables - Held that - against the total outstanding dues of 5.90 Crore confirmed against all the applicants, a pre-deposit of ₹ 8,53,502/- would meet the ends of justice. As already mentioned above, the said amount of ₹ 8,53,502/- is around 1.44% of the total dues and 3.32% of the total duty confirmed, which in our opinion, would not result in any undue hardship to the Applicant, in the circumstances, when the total Revenue of the Applicant is ₹ 25175.10 Lakhs; Cash and Cash equivalents ₹ 1340.52 lakhs; and investments are ₹ 448.64lakhs for the financial year ending 31.03.2013. - stay granted partly.
Issues Involved:
1. Waiver of pre-deposit of total dues. 2. Confirmation of demand for duty evasion. 3. Financial hardship and applicability of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. Issue-Wise Detailed Analysis: 1. Waiver of Pre-Deposit of Total Dues: The Applicants sought waiver of pre-deposit of total dues adjudged against them, totaling Rs. 5,90,54,202. The Tribunal initially directed the Applicants to deposit 25% of Rs. 34,14,010, i.e., Rs. 8,53,502, and allowed waiver of the remaining dues. The Appeals were dismissed on 10.07.2013 for non-compliance with the pre-deposit direction. The Hon'ble Calcutta High Court directed reconsideration of the Applications after restoring the dismissed Appeals. The Tribunal, upon fresh consideration, reaffirmed its earlier direction for the Applicants to deposit Rs. 8,53,502, which is around 1.44% of the total dues, considering the financial hardship and interest of revenue. 2. Confirmation of Demand for Duty Evasion: The demand was confirmed against the Applicants on two counts: - The adjudicating authority confirmed a demand of Rs. 4.47 crores against M/s NICCO Corporation Ltd. for failing to discharge duty on waste and scrap manufactured during the course of manufacturing wires and cables. The Tribunal waived the pre-deposit of this amount considering the Applicant's contention and financial hardship. - A demand of Rs. 34,14,010 and an equal amount of penalty were confirmed on the ground that the Applicants availed CENVAT Credit on 'waste and scrap' of wires and cables but cleared it as non-excisable goods without reversing the appropriate CENVAT Credit/duty. The Tribunal directed the Applicants to deposit 25% of this amount, i.e., Rs. 8,53,502, and waived the remaining dues. 3. Financial Hardship and Applicability of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985: The Applicants argued that since the company is registered as a Sick Unit under BIFR and its net worth is negative, no pre-deposit could be directed. The Tribunal examined the Supreme Court's decision in Sagarika Acoustronics Pvt. Ltd. and concluded that the judgment was specific to its facts and not a binding precedent. The Tribunal also considered the Supreme Court's decision in Metal Box India Ltd., which stated that Section 22 of the Sick Industrial Companies Act does not apply to pre-deposits under Section 35F of the Central Excise Act, 1944. The Tribunal found that the financial position of the Applicant, with total revenue of Rs. 2,175.10 lakhs, cash equivalents of Rs. 1,340.52 lakhs, and investments of Rs. 448.64 lakhs, did not justify a complete waiver of the pre-deposit. Conclusion: The Tribunal directed the Applicants to deposit Rs. 8,53,502 within six weeks, failing which the Appeals would be dismissed. This amount was deemed sufficient to balance the financial hardship of the Applicants and the interest of the revenue. The remaining dues were waived, and their recovery stayed during the pendency of the Appeals. Compliance was to be reported on 28.05.2014.
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