1998 (10) TMI 194 - AT - Central Excise

Summary

Issues:
44 stay applications arising from the same impugned order seeking waiver of pre-deposit of penalty and fine, as well as stay on recovery thereof.

Analysis:

1. Detection of Non-Recorded Stock and Duty Evasion:
- Central Excise officers detected unrecorded finished stock during a factory visit, leading to the discovery of non-recording of a significant quantity of grey fabrics for processing, resulting in less duty payment.
- Statements of involved parties were recorded, and duty not paid by the Mills was calculated at Rs. 40,26,799.

2. Show Cause Notice and Impugned Order:
- A show cause notice was issued seeking recovery of short levied duty, confiscation of unaccounted goods, and penalties on the company, individuals, and dealers.
- The Commissioner's order confirmed duty, confiscated excess goods and assets, imposed penalties equal to the evaded duty, and imposed specific penalties on individuals and manufacturers.

3. Waiver of Pre-Deposit and Stay Application:
- Applicants sought waiver of pre-deposit of penalties and fines through 44 stay applications.
- The advocate clarified that contested duty was paid before the notice, withdrawing the prayer regarding duty.
- Arguments were made for waiving penalties based on precedents and to stay confiscation orders to maintain business operations.

4. Legal Considerations and Tribunal's Decision:
- Section 11AC mandates penalties equal to the determined duty, but Section 35F allows for the discretion to dispense with deposit during appeals.
- The Tribunal considered past cases where full waiver of penalties was granted when duty was voluntarily paid.
- The Tribunal ruled to waive pre-deposit of penalties for all applicants due to the duty being paid, and ordered a stay on the confiscation of assets pending appeal with specific conditions.

5. Conclusion:
- The Tribunal granted the waiver of pre-deposit of penalties, stayed the confiscation order, and required an undertaking and bank guarantee from the applicants to ensure compliance during the appeal process.
- The decision aimed to balance legal requirements with practical considerations to ensure fairness and procedural adherence in the case.