Atma Tube Products Ltd. Vs. Commissioner of C. Ex., - Court Judgment

Excerpt:
1. through the present stay application, the appellants have sought waiver of pre-deppsit of the duty amount of rs. 14,72,885/- and penalty amount of rs. 2,80,000/- as confirmed against them by the commissioner (appeals) through the impugned order-in-appeal dated 13-8-2001 which has been challenged by them in appeal no. e/2595/2001-no. the duty and the penalty had been confirmed against the appellants who are engaged in the manufacture of cold foiled strips and steel tubes on the ground that they wrongly availed the modvat credit of rs. 14,72,884/- during the months 4/94, 5/94 and 6/94 on the strength of inadmissible documents which were not even in their name. they also took mod-vat credit on the basis of gp-1 up to 31-3-1994 for the duty paid goods lying in stock illegally and in violation of the notification no.21-c.e. (n.t.) 94, dated 12-3-1994. they were issued show cause notice for the recovery of the amount, but they did not respond. the astt.commissioned confirmed the duty and imposed the penalty, detailed above, through the order-in-original which had been confirmed by the commissioner (appeals).3. the learned counsel has contended that no proper opportunity was afforded to the appellants for defending their case and that the modvat credit was taken by the appellants oh the strength of valid documents which were issued in the name of their head office, therefore, the appellants have a very strong prima facie case in their favour.4. on the other hand, the learned sdk has reiterated the correctness of the impugned order.6. the bare perusal of the impugned order-in-original as well as the order-in-appeal shows that the appellants were issued notices on number of occasions, but they failed to put up appearance before the adjudicating authority. they even did not file any reply to show cause notice without any sufficient cause. no evidence had also been produced by them before the adjudicating authority to prima facie show that the documents on the basis of which they availed the modvat credit were valid and that the modvat credit of the disputed amount was admissible to them under the law. the adjudicating authority as well as the commissioner (appeals) both have recorded detailed reasons in their respective orders for confirming the duty and the penalty of the appellants. prima facie, we do not find any sufficient ground to disagree with their orders. therefore, in our view, no case for total waiver of the pre-deposit of the duty amount is made out in favour of the appellants.7. however, keeping in view the facts and circumstances of the case and the issue involved, and also taking note of the financial hardship as pleaded by the learned counsel, we direct the appellants to make pre-deposit of rs. 3.5 lakhs (rupees three lakhs and fifty thousand only) on or before 13-3-2002. on making this deposit, the requirement of pre-deposit of the balance duty amount and the entire penalty amount shall stand waived and recovery stayed till the disposal of the appeal.it is made clear that if the terms of this stay order are not complied with within the stipulated period, their appeal shall become liable to be dismissed under section 35f of the act without any further reference to them.

Judgment:
1. Through the present stay application, the appellants have sought waiver of pre-deppsit of the duty amount of Rs. 14,72,885/- and penalty amount of Rs. 2,80,000/- as confirmed against them by the Commissioner (Appeals) through the impugned order-in-appeal dated 13-8-2001 Which has been challenged by them in Appeal No. E/2595/2001-No. The duty and the penalty had been confirmed against the appellants who are engaged in the manufacture of cold foiled strips and steel tubes on the ground that they wrongly availed the Modvat credit of Rs. 14,72,884/- during the months 4/94, 5/94 and 6/94 on the strength of inadmissible documents which were not even in their name. They also took Mod-vat credit on the basis of GP-1 up to 31-3-1994 for the duty paid goods lying in stock illegally and in violation of the Notification No.21-C.E. (N.T.) 94, dated 12-3-1994. They were issued show cause notice for the recovery of the amount, but they did not respond. The Astt.

Commissioned confirmed the duty and imposed the penalty, detailed above, through the order-in-original which had been confirmed by the Commissioner (Appeals).

3. The learned Counsel has contended that no proper opportunity was afforded to the appellants for defending their case and that the Modvat credit was taken by the appellants oh the strength of valid documents which were issued in the name of their Head Office, therefore, the appellants have a very strong prima facie case in their favour.

4. On the other hand, the learned SDK has reiterated the correctness of the impugned order.

6. The bare perusal of the impugned order-in-original as well as the order-in-appeal shows that the appellants were issued notices on number of occasions, but they failed to put up appearance before the adjudicating authority. They even did not file any reply to show cause notice without any sufficient cause. No evidence had also been produced by them before the adjudicating authority to prima facie show that the documents on the basis of which they availed the Modvat credit were valid and that the Modvat credit of the disputed amount was admissible to them under the law. The adjudicating authority as well as the Commissioner (Appeals) both have recorded detailed reasons in their respective orders for confirming the duty and the penalty of the appellants. Prima facie, we do not find any sufficient ground to disagree with their orders. Therefore, in our view, no case for total waiver of the pre-deposit of the duty amount is made out in favour of the appellants.

7. However, keeping in view the facts and circumstances of the case and the issue involved, and also taking note of the financial hardship as pleaded by the learned Counsel, we direct the appellants to make pre-deposit of Rs. 3.5 lakhs (Rupees three lakhs and fifty thousand only) on or before 13-3-2002. On making this deposit, the requirement of pre-deposit of the balance duty amount and the entire penalty amount shall stand waived and recovery stayed till the disposal of the appeal.

It is made clear that if the terms of this stay order are not complied with within the stipulated period, their appeal shall become liable to be dismissed under Section 35F of the Act without any further reference to them.