insulatek Engineers (P) Ltd. Vs. Commissioner of C. Ex., New - Court Judgment

Excerpt:
1. today the matter is posted for hearing the stay petition in pursuance of the order of the hon'ble high court of delhi dated 17-10-2001 in civil writ petition no. 6314/2001.2. shri sugriva dubey, learned advocate, submitted that the tribunal vide stay order no. 71/2001, dated 20-6-2001 directed the applicants to deposit rs. 1 lakh; that they moved the high court by filing the writ petition and high court directed the tribunal to hear the stay petition again for permitting the applicants to make submissions of financial hardship. he further submitted that the factory of the applicants has been closed since 1998 and the bank has stopped the credit facilities; that the applicant has to recover more than rs. 40 lakhs from different buyers and they have also moved national consumer commission for damages for a sum of rs. 2 crores; that the petition has been disposed of with the direction to approach debt recovery tribunal for counter claim as the bank has also filed a recovery petition for more than rs. 70 lakhs; that the plant and machinery installed in the factory were lying unused and even the premises has been locked by the bank officials for recovery of the amount; that under these circumstances the applicants are not in a position to deposit any sum and their appeal may be heard by waiving the requirement of pre-deposit.3. opposing the prayer, shri r.d. negi, learned sdr submitted that the total central excise duty involved is rs. 3,00,862/- and penalty of rs. 25,000/~ against which after considering all the submissions of the applicants, the tribunal directed them to deposit only rs. 1 lakh within 12 weeks; that the stay order was passed in june, 2001 and on their request they were given further period to deposit the said amount by 16-10-2001 which has not been done; the hon'ble high court had directed the matter for reconsideration by the tribunal and the applicants were to file material relevant for the purpose of showing financial hardship; that no new material has been filed by the applicants at all. he, therefore, prayed that in view of these facts, there is no reason for interfering with the stay order passed earlier.4. we have considered the submissions of both the sides. as pointed out by the learned sdr, stay order dated 20-6-2001 was passed after considering the financial hardship of the applicants. they have not submitted any material along with their application for the purpose of showing financial hardship. learned advocate has only drawn our attention to a letter dated 15-11-2001 of canara bank wherein it is mentioned that the bank has filed a suit against them for recovery of outstanding liability and the matter is pending with debt recovery tribunal and there is no deposit of rs. 22 lakhs as mentioned by them.we are of the view that the recovery suit filed by the bank is a transaction which does not reflect that their financial condition is so bad that they cannot deposit rs. 1 lakh and such deposit will causes undue hardship. on the other hand, we observe from their present application under consideration that they have to recover more than rs. 40 lakhs from their different buyers. in view of this, we find no reason to waive recovery of the entire dues as they have not prima facie proved financial hardship. in the interests of justice we extend the time for making the deposit. we direct the applicants to deposit rs. 1 lakh towards duty within 4 weeks from today and on complying with this direction there will be waiver of pre-deposit of remaining amount of duty and entire amount of penalty and the same will remain stayed during the pendency of the appeal. matter will come up for reporting compliance on 13-3-2002.

Judgment:
1. Today the matter is posted for hearing the stay petition in pursuance of the Order of the Hon'ble High Court of Delhi dated 17-10-2001 in Civil Writ Petition No. 6314/2001.

2. Shri Sugriva Dubey, learned Advocate, submitted that the Tribunal vide Stay Order No. 71/2001, dated 20-6-2001 directed the applicants to deposit Rs. 1 lakh; that they moved the High Court by filing the Writ Petition and High Court directed the Tribunal to hear the stay petition again for permitting the applicants to make submissions of financial hardship. He further submitted that the factory of the applicants has been closed since 1998 and the Bank has stopped the credit facilities; that the applicant has to recover more than Rs. 40 lakhs from different buyers and they have also moved National Consumer Commission for damages for a sum of Rs. 2 crores; that the petition has been disposed of with the direction to approach Debt Recovery Tribunal for counter claim as the Bank has also filed a recovery petition for more than Rs. 70 lakhs; that the plant and machinery installed in the factory were lying unused and even the premises has been locked by the bank officials for recovery of the amount; that under these circumstances the applicants are not in a position to deposit any sum and their appeal may be heard by waiving the requirement of pre-deposit.

3. Opposing the prayer, Shri R.D. Negi, learned SDR submitted that the total Central Excise duty involved is Rs. 3,00,862/- and penalty of Rs. 25,000/~ against which after considering all the submissions of the applicants, the Tribunal directed them to deposit only Rs. 1 lakh within 12 weeks; that the Stay Order was passed in June, 2001 and on their request they were given further period to deposit the said amount by 16-10-2001 which has not been done; the Hon'ble High Court had directed the matter for reconsideration by the Tribunal and the applicants were to file material relevant for the purpose of showing financial hardship; that no new material has been filed by the applicants at all. He, therefore, prayed that in view of these facts, there is no reason for interfering with the stay order passed earlier.

4. We have considered the submissions of both the sides. As pointed out by the learned SDR, Stay Order dated 20-6-2001 was passed after considering the financial hardship of the applicants. They have not submitted any material along with their application for the purpose of showing financial hardship. Learned Advocate has only drawn our attention to a letter dated 15-11-2001 of Canara Bank wherein it is mentioned that the Bank has filed a suit against them for recovery of outstanding liability and the matter is pending with Debt Recovery Tribunal and there is no deposit of Rs. 22 lakhs as mentioned by them.

We are of the view that the recovery suit filed by the Bank is a transaction which does not reflect that their financial condition is so bad that they cannot deposit Rs. 1 lakh and such deposit will causes undue hardship. On the other hand, we observe from their present application under consideration that they have to recover more than Rs. 40 lakhs from their different buyers. In view of this, we find no reason to waive recovery of the entire dues as they have not prima facie proved financial hardship. In the interests of justice we extend the time for making the deposit. We direct the applicants to deposit Rs. 1 lakh towards duty within 4 weeks from today and on complying with this direction there will be waiver of pre-deposit of remaining amount of duty and entire amount of penalty and the same will remain stayed during the pendency of the appeal. Matter will come up for reporting compliance on 13-3-2002.