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TMI Blog2008 (12) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... thin a period of three weeks from the date of the order. Subject to the pre-deposit, the appellant will be heard on merit. - 285 of 2008 - - - Dated:- 18-12-2008 - Amitava Lala and A.P. Sahi, JJ. S/Shri Umesh Narayan Sharma, Sr. Advocate and Suneet Kumar, for the Appellant. S/Shri S.P. Kesarwani, Addl. CSC and Zafar Moonis, SC (Excise), for the Respondent. [Order per: Amitava Lala, J.]. - This is an appeal of the appellant-company challenging the order dated 23rd September, 2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. The contention of the appellant is that it manufactures and exports gold jewellery. It received 15 Kgs. of imported gold (admittedly 8 Kgs. by way of purchase and 7 Kgs. by way of loan) from M/s. Metal and Mineral Trading Corporation Limited (for short MMTC). They were required to manufacture gold jewellery and export the same directly in respect of gold purchased by them and through MMTC in respect of gold taken on loan. On 18th March, 1996, strong room of the appellant was sealed by the customs authorities on account of alleged malpractice and series of summons were issued and correspondences were exchanged aiming to veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant contended before the Tribunal that the appellant company has been taken over by U.P. State Financial Corporation as they were not able to repay the loan taken from them. The company is not functioning and facing acute financial hardships. The director of the company has not misappropriated the gold and he was also facing acute financial hardship and an affidavit to that effect has also been filed. 4. The Tribunal held that passing of the order by the concerned Magistrate discharging the appellant/s from the charge of misappropriation of gold does not absolve them of the obligation to account for duty free gold acquired by them for the purpose of making ornaments and exports. In view of the fraudulent nature of the case, the custom department contended therein that there should be pre-deposit of entire amount of penalties imposed upon the appellant. The tribunal prima facie held that appellant company is directly responsible for accounting in respect of gold on both the counts. On their own actions and omissions, they rendered the gold liable for confiscation and therefore, made themselves liable for penalty. The plea of financial hardships has to be considered with a lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be passed by the appellate tribunal under Section 129B of the Customs Act, 1992 (for short the Act) are appealable orders. He said that the order of pre-deposit is to be governed by Section 129E of the Act which is as follows: "129E. Deposit, pending appeal, of [duty and interest], demanded or penalty levied. - Where in any appeal under this Chapter, the decision or order appealed against relates to any [duty and interest] demanded in respect of goods which are not under the control of the customs authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal deposit with the proper officer [duty and interest] demanded or penalty levied: Provided that where in any particular case, the [Commissioner (Appeals)] or the Appellate Tribunal is of the opinion that the deposit of [duty and interest] demanded or penalty levied would cause undue hardship to such person, the [Commissioner (Appeals)] or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue: Provided further that where an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the tribunal itself and in many occasions, by the High Court either in appeal or under writ jurisdiction, if any one wants to invoke the same. But in considering the cause of imposition of pre-deposit, the Court has to follow certain parameters. 14. On the question of pre-deposit, we have taken note of four single Bench judgments of Calcutta High Court delivered by one of us (Amitava Lala J.) having persuasive value of those judgments based on several Supreme Court and High Court judgments. Reportings of judgments are as follows: 1. 2000 (122) E.L.T. 682 (Cal.), (Shree Krishna Engineering Indus. v. Commr. of C.Ex., Calcutta-1) 2. 2000 (117) E.L.T. 539 (Cal.), Smithkline Beecham Consumer Healthcare Ltd. v. CCE (A), Cal. 3. 2000 (121) E.L.T. 602 (Cal.), Mercantile Company v. Commissioner of Central Excise. 4. 2000 (117) E.L.T. 544 (Cal.), Timeken India Limited v. Asstt. Commr. of Customs, NSCBI Airport. 15. Out of above referred judgments, in first one i.e. Shree Krishna Engineering (supra), Court was pleased to frame out guidelines for the purpose of passing appropriate order on the question of pre-deposit, which are as follows: "18. To that extent the petitioner cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and still Tribunal insists on pre-deposit of the amount it would amount to undue hardship; (c) Prima facie case is the conduct of the parties which has to be taken into consideration while it is to be decided whether the deposit has to be dispensed with or not. On the other hand, case of the authority would be: (a) Loss of revenue; (b) Intention of the party; 21. Therefore, these are the balancing factors for the parties for coming to an appropriate conclusion by the authority for the purpose of dispensation of the pre-deposits." 16. Although the referred case is under Central Excise Act but the principle pari-materia applicable even to the Customs Act. In those cases, financial capacity and the hardship were also considered by the Court based on various materials available therein. Each case has its independent view point. 17. In the instant case, the imposition of penalty upon the appellant company as well as the Director is for a sum of Rs. 50,00,000/- wherein pre-deposit is required to be given by the company for a sum of Rs. 5,00,000/- and for the Director a sum of Rs. 1,00,000/-. So far as the liability of the Director is concerned, it has already complied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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