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TMI Blog1990 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,44,436.91 25,000.00 3. E/Stay/2097/90-Bl in appeal No. E/2851/90-B1 M/s. Omega Scientific Co. Appeal Memo signed by Mrs. Sudha Daga W/o Shri Govind Das Daga. 16,44,436.91 25,000.00 4. E/Stay/2099/90-Bl in appeal No. E/2853/90-B1 M/s. Central Capacitors (P) Ltd. Appeal Memo signed by Mrs. Rupkumari wife of Shri Goverdhandas Daga 16,44,436.91 25,000.00 2. Since the above captioned four appeals emerge from a common order and the stay applications emerge from four apeals, the same are being disposed of by this common orders. 3. Shri V. Sridharan, the learned advocate with Shri Govind Das Daga, Chairman and Managing Director of Central Cables Pvt. Ltd. has appeared on behalf of the applicants. He has reiterated the contentions made in the stay applications. Shri V. Sridharan, the learned advocate pleaded that prima facie the applicants have got a good case on merits and the applicants are engaged in the manufacture of electric wires and cables falling under Heading 85.44 of the Schedule to the Central Excise Tariff Act, 1985, and during the relevant period the applicant was working under the MODVA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as such, he pleaded that prima facie the applicants have got a good case on merits. 4. Shri Sridharan on financial aspect pleaded that the financial position of the applicants is not very sound. In support of the same, he referred to the provisional balance-sheet of the applicants for the year ending 31st March, 1990 and the net profit as per profit and loss statement is Rs. 12,64,786.00. He also filed an audited copy of the balance-sheet and profit and loss account for the year ending 31st March, 1989 and the net profit is Rs. 32,29,527.81. Shri Sridharan argued that in case the applicants are desired to deposit the full duty amount and penalty amount, it will amount to undue hardship. He has pleaded for dispensing with the same and also for grant of stay in the case of Central Cables Pvt. Ltd. and the other three concerns. 5. Shri Prabhat Kumar, the learned JDR who has appeared on behalf of the respondent, pleaded that the applicants have made a device to evade central excise duty. In support of his argument, he has referred to a judgment of the Supreme Court in the case of Bajrang Gopilal Gajabi v. M.N. Balkundri Others reported in 1986 (25) E.L.T. 609. He has also ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n goods for job-workers and receiving them back and the ownership never changed hands. These modus operandi was undoubtedly intentional with the sole intention to evade payment of the correct amount of duty due to the Govt. Therefore, all the arguments put-forth by the parties concerned are neither satisfactory nor acceptable and the charges made in the show cause notice are fully established. Let me examine whether the parties contention that there was no suppression of facts etc., is at all correct. The modus operandi followed by M/s. Central Cables (P) Ltd., Nagpur as well as their job-workers is certainly fraudulent and dubious. M/s. Central Cables (P) Ltd., Nagpur, the actual user, receives the quota of raw materials/inputs for the purpose of manufacture of finished products, i.e. wires/cables, were required to do that only and comply with all the provisions of Central Excise laws in this regard. But, however, taking the help of the instruction of endorsing the Gate Passes, they hatched a plan and worked out a modus operandi with sole intention to evade payment of duty. Not only they evaded the duty and availed undue small scale exemption, took undue excess credit, but also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from shares transferred to it by the principal company and serving no purpose whatsoever except to reduce the gross profits of the principal company. These facts speak for themselves. There cannot be direct evidence that the second company was formed as a device to reduce the gross profits of the principal company for whatever purpose. An obvious purpose that is served and which stares one in the face is to reduce the amount to be paid by way of bonus to workmen. It is such an obvious device that no further evidence, direct or circumstantial, is necessary. It was argued that in 1971, the Aril Holdings Ltd. was wound up and amalgamated with the Associated Rubber Industry Ltd. and that this circumstance showed that the initial creation of Aril Holdings Ltd. was not a device of avoidance. But the learned counsel for the company was unable to explain why in the first instance Aril Holdings Ltd. was created and why later it was wound up. Probably, after Aril Holdings Ltd. was created, some unforeseen difficulties arose which have not been brought to light before us and it become necessary to wind it up and amalgamate it with the Associated Rubber Industry Ltd. We are, therefore, satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, balance of convenience also is not in favour of the applicants. Hon ble Supreme Court in the case of Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd., and Others reported in 1985 (19) E.L.T. 22 (SC) had observed as under :- 3. In Titaghur Paper Mills Co. Ltd. v. State of Orissa, A.P. Sen, E.S. Venkataramiah and R.B. Misra, JJ held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the Tribunal and thereafter to have the case stated to the High Court, it was not for the High Court to exercise its extraordinary jurisdiction under Article 226 of the Constitution ignoring as it were, the complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed a matter of tragic concern to us. Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extra-ordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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