2010 (4) TMI 477 - HC - Central Excise

Stay - Appeal against the duty liability exceeding Rs. 1 crore. The appellant already deposited exceeding Rs.50 lakhs. It is submitted that the appellant company is running into losses and is unable to pay the balance duty. Certificates produced indicating supplies in the nature of ship stores for Indian navy. Held that - appellant not entitled to unconditional stay of duty amount. Appellant directed to pay 25% towards duty liability after taking amount paid already into account.

Summary

Issues:
1. Application for stay against coercive recovery of balance duty amount and penalty.
2. Justification for granting stay based on certificates issued by Warship Production Superintendent.
3. Opposing application citing precedent from the Apex Court.
4. Determining the entitlement of the appellant for unconditional stay against recovery of duty amount.
5. Conditions imposed for granting interim stay.
6. Disposal of the stay application.
7. Filing of requisite paper book by the appellant.
8. Service of notice of appeal and provision of certified copy of the order.

Analysis:
1. The appellant sought a stay against coercive recovery of the balance duty amount and penalty, claiming financial constraints due to running losses. The appellant had paid a portion of the duty liability and relied on certificates from the Warship Production Superintendent to support their case.

2. The certificates issued by the Warship Production Superintendent were considered in determining the justification for granting a stay against coercive recovery. While these certificates could support the stay against penalty recovery, the court found the appellant not entitled to an unconditional stay for the duty amount.

3. The respondent opposed the application, citing a precedent from the Apex Court, Leader Engineering Works v. Commissioner of Central Excise, Chandigarh, to argue against the appellant's claim for a stay.

4. After hearing arguments from both parties, the court decided that the appellant should pay a further 25% of the duty liability in cash within two months and provide a bank guarantee for the remaining 25% within one month to maintain the interim stay. Failure to comply would result in the vacation of the stay without further reference to the court.

5. The court disposed of the stay application based on the conditions imposed for the appellant to fulfill to maintain the interim stay, balancing the interests of justice with the appellant's financial situation.

6. Additionally, the appellant was directed to file the requisite number of paper books within three months from the date of the judgment to proceed further with the case.

7. Service of notice of appeal was waived for respondent No. 1, represented by its advocate, Mr. Bharadwaj, while it was required for other non-appearing respondents to be informed about the appeal.

8. The judgment concluded by allowing the provision of an urgent certified copy of the order upon application, subject to compliance with all necessary formalities for the parties involved.