2015 (5) TMI 558 - AT - Central Excise

Waiver of pre deposit - Duty evasion - Held that - Duty evasion by M/s Lakhotia Metalizers Pvt. Ltd. and M/s A. B. Polymers, has been quantified from the records recovered from their premises - case is based on appreciation of evidence produced by both the sides, which would be gone in detail at the time of final disposal of the Appeals. However, from the findings of the ld. Adjudicating Commissioner, it is noted that each of the Applicants has acted and omitted in a manner contributed to the alleged duty evasion. Accordingly, prima-facie, we are of the view that none of the Applicants are able to make out a case for full waiver of the predeposit at this stage. - Partial Stay granted.

Summary

Issues:
Waiver of predeposit of duty and penalty under Section 11AC of the Central Excise Act, 1944 for multiple applicants involved in aiding/abetting duty evasion by M/s Lakhotia Metalizers Pvt. Ltd.

Analysis:

Issue 1: Waiver of predeposit for M/s Lakhotia Metalizers Pvt. Ltd.
The duty evasion by M/s Lakhotia Metalizers Pvt. Ltd. was quantified based on recovered records showing removal of goods not recorded in statutory accounts. The Applicants argued that duty liability should be reduced due to various factors not considered by the Adjudicating Commissioner. However, the Tribunal found that each Applicant contributed to the alleged duty evasion, leading to a directive for M/s Lakhotia Metalizers Pvt. Ltd. to deposit 10% of confirmed duty, with a waiver of balance dues upon compliance within eight weeks.

Issue 2: Waiver of predeposit for M/s A. B. Polymers and others
M/s A. B. Polymers and its Partner were penalized for issuing invoices to non-existing buyers, leading to duty evasion. The Tribunal directed M/s A. B. Polymers to deposit 5% of confirmed duty, with waivers upon compliance. Other Applicants, including directors of different companies, were also directed to deposit 5% of penalties imposed, with waivers upon compliance within eight weeks.

Issue 3: Abetment allegations and financial crisis
Allegations of abetment were raised against various Applicants for aiding in the duty evasion. Arguments were presented regarding the roles and financial situations of the Applicants. The Tribunal considered evidence produced by both sides and found that the Applicants had contributed to the duty evasion, leading to directives for partial deposits and waivers based on compliance.

Final Directive
The Tribunal directed specific percentages of duty and penalty deposits for different Applicants involved in aiding/abetting the duty evasion by M/s Lakhotia Metalizers Pvt. Ltd. Compliance within eight weeks was mandated for waivers of balance dues and penalties. Non-compliance would result in dismissal of all Appeals without further notice. Compliance reporting was set for a specific date to monitor adherence to the directives.