Enva Chem (India) Limited Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the application for waiver of predeposit of duly of rs. 17,83,382/- and penalty of rs. 5,50,000/- arises out of the order of the commissioner of central excise (appeals), mumbai. use demand arises as a result of holding that the applicants had defaulted in payment of excise duty in terms of the fortnightly scheme provided under the rules, and were therefore required to pay excise duty for clearance of each consignment by debit to the account current. the applicant's payment by utilization of cenvat credit has been objected to by the commissioner.2. we have heard both sides and perused clause (e) and (b) of rule 173g of the central excise rules. we do not see prima acie force in the submissions of the applicant that there is an option in clause (b) for use of cenvat credit for discharge of duty liability, in view of the language of clause (e) of rule 173g which clearly stipulates that when the manufacturer forfeits the facility to pay the dues in instalments for a period of two months, he shall be required to pay excise duty for each consignment by debit to the account current referred to in clause (b). prima facie only first portion of clause (b) relating to discharge of duly liability by debit in account current alone has been referred to clause (c) of the rules. the applicants therefore cannot be said to have made out prima facie case for waiver on merits. we now come to the financial position as projected before us. the company has been declared as a sick industrial unit by the bifr. the balance sheet for the year 31.3.2002 is placed before us to plead financial inability to make a of predeposit. we note that although the company has suffered a loss, there is a high sales income as seen from the balance sheet ' and it would not cause undue hardship if they are directed comply with the requirement of predeposit of duty. a case for total waiver of predeposit has not been made by the applicants. keeping in view the financial position as reflected in the balance sheet, we direct pre-deposit of rs. 10 lakhs towards duty within a period of eight weeks from today and on such deposit, the predeposit of balance duty and penalty shall stand waived and recovery thereof stayed pending the appeal. failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice.

Judgment:
1. The application for waiver of predeposit of duly of Rs. 17,83,382/- and penalty of Rs. 5,50,000/- arises out of the order of the Commissioner of Central Excise (Appeals), Mumbai. Use demand arises as a result of holding that the applicants had defaulted in payment of excise duty in terms of the fortnightly scheme provided under the Rules, and were therefore required to pay excise duty for clearance of each consignment by debit to the account current. The applicant's payment by utilization of Cenvat credit has been objected to by the Commissioner.

2. We have heard both sides and perused Clause (e) and (b) of Rule 173G of the Central Excise Rules. We do not see prima acie force in the submissions of the applicant that there is an option in Clause (b) for use of cenvat credit for discharge of duty liability, in view of the language of Clause (e) of Rule 173G which clearly stipulates that when the manufacturer forfeits the facility to pay the dues in instalments for a period of two months, he shall be required to pay excise duty for each consignment by debit to the account current referred to in Clause (b). Prima facie only first portion of Clause (b) relating to discharge of duly liability by debit in account current alone has been referred to Clause (c) of the Rules. The applicants therefore cannot be said to have made out prima facie case for waiver on merits. We now come to the financial position as projected before us. The company has been declared as a sick industrial Unit by the BIFR. The balance sheet for the year 31.3.2002 is placed before us to plead financial inability to make a of predeposit. We note that although the company has suffered a loss, there is a high sales income as seen from the balance sheet ' and it would not cause undue hardship if they are directed comply with the requirement of predeposit of duty. A case for total waiver of predeposit has not been made by the applicants. Keeping in view the financial position as reflected in the balance sheet, we direct pre-deposit of Rs. 10 lakhs towards duty within a period of eight weeks from today and on such deposit, the predeposit of balance duty and penalty shall stand waived and recovery thereof stayed pending the appeal. Failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice.