1991 (5) TMI 158 - AT - Central Excise

Summary

Issues:
- Appeal against the order passed by the Collector of Central Excise, Bombay
- Provisional release of goods with a fine imposed in lieu of confiscation
- Grant of stay application by the Appellate Tribunal

Analysis:
1. The appellants filed an appeal against the order by the Collector of Central Excise, Bombay. The Collector provisionally released the seized goods from M/s. ION Exchange (I) Ltd. on execution of a B-II bond and a security deposit of Rs. 2 lakhs. The Collector gave an option to redeem the goods by paying a fine of Rs. 24 lakhs. The appellants argued that no duty demand or penalty was imposed. The Tribunal was urged to exercise inherent power to prevent irrecoverable loss, citing relevant case laws.

2. The Tribunal examined the impugned order, noting the provisional release of goods and the imposition of a fine of Rs. 22 lakhs in lieu of confiscation. The Tribunal referred to a previous case where it was held that once goods are released provisionally against a bond and not physically available for confiscation, imposing a fine in lieu of confiscation was not appropriate. The Tribunal observed that the Collector should have enforced the bond instead of confiscating the goods.

3. The appellants, as purchasers of goods, argued that the Revenue should have safeguarded their interests when releasing goods provisionally. They cited a Supreme Court judgment emphasizing the Tribunal's inherent power in such cases. The Tribunal considered the merits of the case and found it suitable to grant a stay. The Tribunal ordered a stay on the recovery proceedings mentioned in the Collector's letter, allowing the Revenue to enforce the B-11 bond if other remedies were available.

4. The Tribunal's decision was based on the principle that the Tribunal has the power to grant a stay as incidental to its appellate jurisdiction. It emphasized that the power of stay should be exercised judiciously and only in deserving cases where the appeal's purpose would be frustrated by allowing the recovery proceedings to continue. The Tribunal found that the appellants had a strong prima facie case on merits, justifying the grant of a stay.

5. In conclusion, the Tribunal granted a stay on the impugned order regarding the recovery proceedings, allowing the Revenue to enforce the B-11 bond if necessary. The decision was made to prevent the appeal's purpose from being rendered nugatory and to ensure a fair consideration of the case on its merits.