2004 (12) TMI 579 - AT - Central Excise

Summary

Issues: Stay application arising out of order of Commissioner demanding duty, penalty, and redemption fine; Ex parte adjudication proceedings; Evidence of evasion based on private diary; Financial hardship claim; Settlement Commission approach; Direction to deposit Rs. 2 lakhs towards duty.

Analysis:
The case involved a stay application following an order by the Commissioner of Central Excise, Mumbai-VI, demanding duty, penalty, and imposing a redemption fine on confiscated goods. The applicant, a manufacturer of fabrics, had certain goods removed without paying duty, leading to an investigation and seizure of incriminating documents. The main grounds for the stay application included the contention that adjudication proceedings were conducted ex parte without giving the applicant a chance to be heard. Additionally, the applicant argued that the demand was confirmed based on evidence from a private diary without independent verification related to production, buyer inquiries, or other factors. Financial hardship was also cited during the hearing.

During the proceedings, it was noted that the applicant had approached the Settlement Commission to resolve the dispute but did not pursue the matter further, resulting in the dismissal of the application for settlement. The applicant acknowledged the evidence of evasion amounting to Rs. 11,26,974.54, indicating clandestine removal to that extent. Despite considering directing the applicant to deposit the full amount under Section 35F of the Central Excise Act, it was recognized that the applicant, a retired Army Officer with financial constraints, could not afford the full deposit. Consequently, the Tribunal directed the applicant to deposit Rs. 2 lakhs towards duty by a specified date, taking into account the previous payment of approximately Rs. 3 lakhs. Upon compliance with this directive, further deposits of duty and penalty were waived during the appeal process, with a warning that non-compliance would lead to dismissal of the appeal.

The Tribunal pronounced the operative part of the decision in court, emphasizing the importance of compliance by a specific date. The judgment balanced the acknowledgment of evasion with the applicant's financial situation, providing a directive for partial deposit while offering concessions on further payments subject to compliance.