1999 (6) TMI 302 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duties and penalties, stay of recovery, denial of natural justice, quantification of duty evasion, existence of undisclosed bank account, voluntary payments made by the assessees, prima facie case, hardship due to payment, waiver and stay of penalty, time limit for deposit.

Denial of Natural Justice:
The judgment pertains to six applications seeking waiver of pre-deposit of duties and penalties, all arising from the same impugned order. The applicants argued denial of natural justice, claiming incomplete documentation for the entire period of demand, leading to their inability to file a reply. Despite repeated requests for full documents, the Collector passed the order, prompting the plea for setting it aside. The Commissioner had granted adjournments on multiple occasions, but the applicants failed to make a strong case for denial of adequate opportunity.

Quantification of Duty Evasion:
The applicants contested the quantification of duty evasion, alleging that the demand was based on incomplete documents and stray instances of misprinted duplicate invoices. They claimed the department failed to provide evidence of clandestine removal and did not consider their business of dealing in wires and cables. However, the judgment found that the applicants possessed necessary documents to show the lesser duty payable, but their failure to do so weakened their case.

Existence of Undisclosed Bank Account:
The undisclosed bank account, substantial cash transactions, and the failure to disclose it to the Income Tax Department were key factors indicating duty evasion. The judgment highlighted that the existence of the undisclosed bank account served as strong corroborative evidence against the applicants, reinforcing the allegations of clandestine removal of goods without duty payment.

Voluntary Payments and Prima Facie Case:
The applicants voluntarily paid a significant sum towards the confirmed duty, which the Commissioner noted. The judgment questioned the applicants' claim that the payment was to maintain good relations with the department, finding it difficult to accept. Despite claims of hardship resulting from halted orders and frozen funds, the applicants failed to establish a prima facie case, leading to the directive for depositing specified amounts towards the confirmed duty.

Waiver and Stay of Penalty:
The judgment directed M/s. Myco Electricals (P) Ltd. and specific individuals to deposit sums towards the confirmed duty while waiving the penalty for minor noticees. The penalty imposed on M/s. Myco Electricals (P) Ltd. was stayed upon depositing the specified amount within two months. Additionally, the applicants were permitted to utilize their assets under the condition of not disposing of them during the proceedings' pendency.

This detailed analysis of the judgment addresses the issues of denial of natural justice, quantification of duty evasion, undisclosed bank account implications, voluntary payments, establishment of a prima facie case, and the directives for deposit, waiver, and stay of penalties.