TMI Blog1985 (8) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... ules made thereunder. The demand raised in the first show cause notice, which pertained to the period 1-12-1979 to 31-12-1979 was for ₹ 74,160/-, while the demand in the second show cause notice, which covered the period 1-1-1980 to 31-5-1984 was for ₹ 21,16,030.75. The petitioner-company filed their replies to these notices and also produced evidence against the demands raised against them. After appraising the whole evidence, the Collector of Central Excise confirmed both the demands, which, when added, come to ₹ 21,90,190.75. The penalty imposed under 173Q was ₹ 10 lakhs. 3. The petitioner-company has challenged the order of the Collector before this Tribunal and along with the Memorandum of Appeal, an application has been made under Section 35F of the Central Excises and Salt Act for dispensing with the pre-deposit of the disputed amounts. A further prayer has been made that the recovery of the said amounts be also stayed till the disposal of the appeal. 4. Dr. L.M. Singhvi, the learned Counsel, appearing on behalf of the petitioner-company, has contended that both the demands in the show-cause notices and later confirmed in the adjudication order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order of this Company is at page 46 of the paper book). In the said case for collecting same kind of maintenance charges, no differential duty was demanded by adding these charges to the assessable value. On the other hand, the proceedings initiated against the said company were dropped and the exclusion of these maintenance charges was accepted. 7. Question of limitation is indubitably a mixed question of law and fact. The arguments of both the sides will be duly considered at the time of final hearing. We feel that it will cause prejudice to the parties if we express any opinion on this issue at this stage. We, however, take note of the contentious point for considering the interim relief. 8. Dr. Singhvi has further argued that it would cause undue hardship to his clients if the differential duty and the penalty amounts are directed to be deposited and has stressed for their waiver in the circumstances of the case. His main thrust is that the petitioners have very small liquid assets and that it will be well nigh impossible to raise funds for depositing the disputed amounts. The learned Counsel has further submitted that the cash-in-hand alone constitutes the liquid asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also in favour of his clients. 10A. On the other hand, Shri Jain, the learned SDR, has contended that the applicants have to show undue hardship in the deposit of the amounts before any interim relief can be granted. He pointed out that the applicants had not disclosed in their price list about the collection of the CMS charges in any manner. It was in answer to a query that on 8th July, 1982, there was a letter from the applicants wherein they had referred to the CMS charges and collection of ₹ 300/- per unit per year. The show-cause notices were issued on the basis of suppression of material facts and wilful mis-statement. According to him, the assessments subsequent to 1982 were provisional. The learned SDR also drew our attention to the balance sheet filed by the applicants and stated that according to the Director s Report for the accounting year 30-4-1984, the company had earned a net profit of ₹ 7.07 lakhs, but had transferred ₹ 4.40 lakhs to the General Reserve. They had also declared a dividend of 12.5%. They had also not taken any loans from any other company, and were further considering the expansion of their activities, although one more unit ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed as under :- Liquid Assets. These, sometimes called floating assets, consist of cash and other assets continually undergoing conversion into cash, such as stock, sundry debtors, bills receivable. They are to be distinguished from fixed assets which are acquired for use in the business, such as premises, plant, and machinery. It is the function of an asset, not its nature, which determines into which category it goes, e.g. machinery is a fixed asset in a factory-it is what a business trades with in a business concerned with manufacture of machinery, it will be a liquid asset-it is what the business trades in. The expressions liquidity or liquid assets as understood in legal as well as in banking and commercial sense have been very clearly explained in the two definitions extracted above. In the light of these expositions, the meaning of the expression as put forward by Dr. Singhvi is very narrow. According to him liquidity or liquid assets means cash balance alone and exclude other assets, which can be converted into cash. If it be so, one can easily manipulate his bank balances to the minimum and thereby plead undue hardship. In our view, while considering the ambit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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