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TMI Blog2015 (9) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the appellants at the interim stage to protect the interest of revenue. CESTAT has also considered, while passing the order impugned, about the factors stated by counsel for the appellants and has, prima-facie, come to the conclusion that the respondent had thoroughly analyzed the material recovered from Jai Ambika Dharamkanta, records of Dharamkanta and slips recovered there from, do prove the nexus about the clandestine clearance and removal of the goods made by the appellants in collusion with others and which was based with Dharamkanta weighment slips of goods of the appellants. It has been further observed that even the Director, in the statement recorded under section 14, demonstrated that weighment slip containing details of truck No. RJ05G2289 and RJ21G1014 related to the appellants, which were used for clandestine removal of goods. All the assets are already pledged/mortgaged with the Banks and, therefore, the interest of revenue cannot be safeguarded merely by the submission of counsel for the appellant that the appellants will not dispose of the assets, to be sold or alienated. When the same are already mortgaged with the Banks and bank would have first c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Department from the year 2004. They are using M.S. Scrap and Sponge Iron, which, after carrying out manufacturing process and deployment of labour, is converted into final product. On the basis of intelligence gathered by the Directorate General of Central Excise Intelligence, Jaipur that the assessee-appellant had indulged in large scale evasion of Central Excise, a search was carried out at the unit of the appellants on 23/12/2009 wherein a 'Panchnama' was drawn and incriminating documents were found and seized by the authorized officers. Simultaneous follow up searches were also carried at the raw material supplier, Dharamkanta owner, dealers, transporters etc. and it was noticed that the appellants were indulged in large scale evasion of central excise duty by way of clandestine production of excisable goods and removal of the same without payment of excise duty. A detailed show cause notice was issued to the appellants by the Addl. Director General on 15/02/2012 detailing therein the manner in which the respondent-department was on the basis of incriminating documents collected, and on the basis of statements of various persons and after collecting and analyzing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, the appellants preferred an appeal as also moved an application for waiver of pre-deposit of duty and penalty and grant of stay under Section 35-F of the Central Excise Act before the CESTAT ON 26/04/2013 and the order impugned, as referred to above, was passed by the CESTAT on the said stay application after hearing both the parties directing to deposit an amount of ₹ 4 crores + 10 lakhs as a pre-deposit and subject to deposit of the said amount the appeal would be heard on merits and balance of the disputed demand would be stayed till disposal of appeal by CESTAT. 5. Shri Sameer Jain, ld. counsel for the appellants submitted that the respondent has not provided necessary material on the basis of which such a huge evasion of central excise has been alleged to be found and he submitted that it is a baseless allegation without any material and contrary to the material on record. He further submitted that thousands of papers were found during the course of the search, however, only some of the documents were provided and an inference has been drawn on the basis of the said papers that the appellants evaded the excise duty to this extent. He submitted that the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed that the appellant in the said case shall be heard without requiring further deposit. He also relied upon judgment of the Hon'ble Apex Court in the case of Lakshman Exports Limited Vs. Collector of Central Excise, reported in 2002(143) E.L.T. 21 (S.C.); judgment of this Court in the case of PGO Processors Private Limited Vs. Commissioner, C.Ex., reported in 2000(122) E.L.T. 26 (Raj.); judgment of Hon'ble Delhi High Court in the case of Basudev Garg Vs. Commissioner of Customs, reported in 2013(294) E.L.T. 353 (Del.). 6. Shri Ajay Shukla, ld. counsel for the respondent-revenue, on the contrary, submitted, that it is a unique case where the respondent-Commissioner has been able to prove the excise duty evasion to the tune of over ₹ 52 crores and after detailed analysis of thousands of papers during the course of search as also after going through statements of various employees working for the appellants as well as the Director of the appellant who admitted about such papers. He further submitted that the respondent was able to even nab Dharamkanta owner where the goods which had been clandestinely removed were weighed at Jai Ambika Dharamkanta and the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that where in any particular case, the Commissioner (Appeals) of the Appellate Tribunal is of opinion that the deposit of duty 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 interest of revenue. 9. Section 35-F of the Central Excise Act contemplates deposit of the duty demanded or the penalty levied pending the appeal filed before the Commissioner (Appeals) or the Appellate Tribunal as the case may be. The word shall appearing under Section 35-F makes it clear that such a pre-deposit is mandatory, however, the first proviso to Section 35-F gives a discretionary power to the appellate authority to dispense with such deposit subject to such condition so as to safeguard the interest of the revenue, if in its opinion the deposit of duty demanded or penalty levied would cause undue hardship to the appellant. However, in case the appellant does not move an application under Section 35-F, then the entire duty demanded as held by the assessing officer/Commissioner is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 129A of the Act as controlled by Section 129E of the Act, and that right is with a condition and thus a conditional right. The petitioner in this case has no absolute right of stay. He could obtain stay of realization of tax levied or penalty imposed in an appeal subject to the limitations of Section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of undue hardships . That discretion must be exercised on relevant materials, honestly, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority. In this case it is manifest that the order of the Tribunal was passed honestly, bona fide and having regard to the plea of 'undue hardship' as canvassed by the appellant. There was no error of jurisdiction or misdirection . 13. The Hon'ble Apex Court again, in a later judgment Indu Nissan Oxo Chemicals Pvt. Ltd. Vs. Union of India (UOI) and Ors. (supra), while considering the scope of Section 35-F, as in the present case, after analyzing various judgments, held that even if there is financial hardship, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens' faith in the impartiality of public administration, interim relief can be given. 13. Section 129-E of the Act reads 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the aforesaid time, the appeal before the CESTAT shall stand dismissed . 14. The Hon'ble Supreme Court in Monotosh Saha Vs. Special Director, Enforcement Directorate and Another reported in 2008 AIR SCW 6004 observed as under:- Two significant expressions used in the provisions are undue hardship to such person and safeguard the realisation of penalty . Therefore, while dealing with the application twin requirements of considerations i.e. Consideration of undue hardship aspect and imposition of conditions to safeguard the realisation of penalty have to be kept in view. 15. Even though the said decision was made while dealing with the order of pre-deposit contemplated under Foreign Exchange Management Act, 1999, still the analogy made therein can be applied to Section 35F of the Central Excise Act also. Thus, from the reading of the above decision of the Apex Court, the twin test viz., the undue hardship and safeguarding the interest of the Revenue are to be applied to each and every case where waiver of pre-deposit is sought for. In the very same decision, it is also observed by the Apex Court that undue hardship is a matter within the special knowledge of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erim order and there should not be the slightest indication of a likelihood of prejudice to the public interest. We are very sorry to remark that these considerations have not been borne in mind by the High Court and interim order of this magnitude had been granted for the mere asking. The appeal is allowed with costs . 18. The Hon'ble Apex Court again, in the case of Empire Industries Ltd. And ors Vs. Union of India and Ors., reported in AIR 1986 (SC) 662, had in fiscal matters came down heavily on grant of interim orders or in accepting bank guarantee and accordingly observed as under:- Good deal of arguments were canvassed before us for variation or vacation of the interim orders passed in these cases. Different Courts sometimes pass different interim orders as the Courts think fit. It is a matter of common knowledge that the interim orders passed by particular Courts on certain considerations are not precedents for other cases which may be on similar facts. An argument is being build up now-a-days that once an interim order has been passed by this Court on certain factors specially in fiscal matters, in subsequent matters on more or less similar facts, there should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, in Shree Cement Ltd. vs. The Commissioner (Appeals-II) Ors. (supra), decided on 21.02.2012. Order dated 21.02.2012 is also reproduced as under:- By way of filling this writ petition,interim order dated 29.12.2011 passed by the Commissioner (Appeals-II), Customs Central Excise under Section 35 F of the Central Excise Act has been questioned. The question involved was that whether the appellants are entitled for credit to the extent of input/input service used in the production of electricity which was not captively consumed for manufacture of final product or for other purpose within the factory but was sold to other different legal entity out of the factory production of appellants as held by the Adjudicatory Authority. Considering the fact that supply of electricity was not within factory, we find the order to be justified. Even otherwise, no irreparable injury is going to be caused by dispensing with deposit of amount of cenvat credit of ₹ 53,17,767/- and ₹ 90,93,961/- availed by petitioner as well as 50% of the amount of penalty imposed under Rule 15(1) of the CENVAT Credit Rules, 2004, which is ₹ 8,50,000/- in case of appellant No.1 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collusion with others and which was based with Dharamkanta weighment slips of goods of the appellants. It has been further observed that even the Director, in the statement recorded under section 14, demonstrated that weighment slip containing details of truck No. RJ05G2289 and RJ21G1014 related to the appellants, which were used for clandestine removal of goods. It has also been observed by the Commissioner/CESTAT that raw material supplied, as appearing in para of the adjudication order also proves that the supplies were not recorded by the appellant and ultimately, the CESTAT has come to the conclusion that prima-facie it appears that a premeditated design was made to defraud the revenue. We are also not convinced with the arguments advanced by counsel for the appellant by merely submitting that the appellants have an overdraft facility (OD limit) with the Bank. Neither the appellants have placed their balance sheet as on 31/03/2013 as well as profit and loss account or statement of affairs say as on the date of filing of this appeal or other material or evidence so as to come to the conclusion that the appellants do face undue hardship in depositing the aforesaid amount as dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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