2004 (97) ECC 437 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(A)

Smt. Jyoti Balasundaram, Member (J) and Shri V.K. Agrawal, Member (T)

Euro Cotspin Ltd. & Ors

Versus

CCE, Chandigarh-I

E/Stay/1572-1576/2004-NB(A) in Appeal No. 2361-2365/2004-NB(A)

[Arising out of Order-in-Original No. 152/CE/2003 dated 20.12.2003 passed by the Commissioner of Central Excise, Chandigarh-I]

Stay Order No. 668-72/2004-NB(A), dt. 15.7.2004, Certified 26.7.2004

Waiver of pre-deposit

The records available with the department are for the period September 1999 to April 2000, while the Applicants have made out a strong prima facie case for the period prior to September 1999 and post April 2000. However, in respect of the period for which the documents are available with the department, the applicants have not made out a prima facie case for waiver of the entire amount of duty demanded. As the department has not disputed the use of indigenous raw material, there is a prima facie case for extending the benefit of Notification No. 8/97-CE. The appellant company is therefore directed to deposit a sum of Rs. 20 lakhs only within 8 weeks from today and on complying with this direction there shall be waiver of pre-deposit of the remaining amount of duty and the entire amount of penalties imposed on the applicants and the recovery of the same will remain stayed during the pendency of the appeals.

PRESENT :

Shri K.K. Anand, Adv. for the appellants.

Ms. K.A. Mishra, SDR for the respondent.

Per : V.K. Agrawal

These are 5 applications for waiver of pre-deposit of Central Excise duty and penalties as under:-

S.No. | Name of applicant | Duty | Penalty
1. | Euro Cotspin Ltd. | 4,60,45,160 | 4,60,45,160
2. | Shri R.P. Sharma | - | 50,000
3. | Shri Nitin Khandelwal | - | 50,000
4. | Shri Rajeev Khandelwal | - | 2,00,000
5. | Shri J.C. Khandelwal | - | 5,00,000

Shri K.K. Anand, learned Advocate, submitted after the officers visited the factory premises of the applicants on 24.10.2000 a show cause notice dated 18.2.2002 was issued for demanding duty for the period of 1.11.97 to 31.3.2001; that all the documents relied upon in the show cause notice including Annexure `C' & `D' had not been received by them; that they had requested the department for supply of those documents but the same have not been received by them; that after receipt of the show cause notice fire broke out in their factory; that it was intimated to the department. He, further, mentioned that due to labour problem their factory was closed and it was not possible for the applicants to access to the record lying in the factory and as a consequence of which they could not submit their reply to the show cause notice. On merit the learned Advocate submitted that the duty has been demanded on the basis of certain entries in the registers which are available for the period September 1999 to April 2000 showing cash inflow from their dealers; that the entire duty has been confirmed right from November 1997 to March 2001 i.e. even after the period after which the officers searched their factory premises. Finally he mentioned that the duty has been demanded without extending the benefit of Notification No. 8/97-CE which provides concessional rate of duty to the clearances made by a 100% E.O.U., if the finished products have been manufactured out of indigenous raw material; that the fact of use of indigenous inputs has not been disputed by the Revenue; that the duty liability, if any, for the period September 1999 to April 2000 will be about Rs. 15 to 20 lakhs only and for the entire period it may be little more than Rs. 1 crore; that the Company has been referred to BIFR and accumulated losses as on 31.3.2003 are more than Rs. 98 crores and as such any direction towards pre-deposit will cause financial hardship.

2. Opposing the prayer Ms. K.A. Mishra, learned SDR, submitted that the Managing Director of the Company had given receipt of the show cause notice alongwith all the legible documents. He contended that the applicants cannot claim that all the documents were not supplied to them. She also examined to us the modus operandi adopted by the applicants and submitted that the entire price was divided into two elements, the portion of one element was received through draft and the portion which reflected the value not shown in Excise invoices was received in cash by the Appellant company; that certain dealers have also admitted in their submissions that they were following this modus operandi since, 1997.

3. We have considered the submissions of both the sides. In view of the admitted position that the records available with the department are for the period September 1999 to April 2000, the Applicants have made out a strong prima facie case for the period prior to September 1999 and post April 2000. However, in respect of the period for which the documents are available with the department, the applicants have not made out a prima facie case for waiver of the entire amount of duty demanded. As the department has not disputed the use of indigenous raw material, there is a prima facie case for extending the benefit of Notification No. 8/97-CE. In view of this we direct the applicant company to deposit a sum of Rs. 20 lakhs only within 8 weeks from today and on complying with this direction there shall be waiver of pre-deposit of the remaining amount of duty and the entire amount of penalties imposed on the applicants and the recovery of the same will remain stayed during the pendency of the appeals. Any failure to comply with this direction will result in dismissal of all the appeals without any further notice. The matter will come up for reporting compliance on 22nd September, 2004.

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