Full Judgment
2. Arguing the stay petitions Shri V.K. Madan, Managing Partner of M/s.
Urja Plast & Cables and others submits that the Department has confirmed the demand of duty of the above amount relying on the statement submitted to the Bank. He submits that the banker had allowed them overdraft limits and since they needed more money they were hypothecating the goods with the bank and getting higher over-draft limits. He submits that in the statement submitted to the bank it was not only the value of the finished goods but the value of the raw materials as also the value of the goods in the pipeline was included.
He submits that for purpose of getting higher credit limits sometimes the value of goods was inflated and such statements were being submitted to the bank. He submits that whatever they were manufacturing they were recording in the statutory records and clearing them on payment of duty. He submits that the Department has no evidence except the statements submitted to the bank. Learned Representative submits that figures supplied to the bank cannot be the basis for computing the value of the goods for purpose of levy and collection of duty.
3. Learned Representative also submits that the unit of the applicants is closed for the last three years; that the applicants had incurred losses; that the matter has been referred to Debt Recovery Tribunal and the applicant has no funds to make any pre-deposit. He, therefore, prays that pre-deposit of duty and penalties may be waived, 4. Shri Rajiv Tandon, learned SDR opposes the request and submits that the Authorities below had taken all the facts stated by the applicants into consideration while confirming the demand of duty.
5. We have heard the submissions. On careful consideration of the submissions made we note that there is finding in the orders of the Commissioner that for purpose of computing duty they have taken the value of the finished goods only from the statement submitted to the bank. We also note that there are statements of bank officials who have deposed that there was verification of the stock pledged with the bank.
We find from the above that the applicants have been clearing substantial quantities of finished goods when the factory was in operation. They must have funds which they might have acquired as a sale proceeds of the finished goods pledged with the bank. Though the applicant has drawn our attention to the balance sheet prepared but the balance sheet is only for one year closing on 31st March, 1999 which does not bring out the position clearly. Having regard to the above facts and circumstances of the case and having regard to the fact that the factory is closed and there was loss we direct the applicants to deposit a sum of Rs. 2.0 crore (Rupees two crore) on or before 18-5-2002. On deposit of this amount, the deposit of the balance amount of duty and total penalties shall be dispensed with and recovery thereof shall remain stayed during pendency of the appeals.
Non-compliance of the order shall lead to the vacation of the stay and dismissal of the appeals without any further notice.
6. Matters should come up for reporting compliance and passing further orders on 24-5-2002.