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2009 (8) TMI 1003

..... Shri K.M. Mondal, Consultant, for the Respondent. ORDER Vide a common Stay Order No. S/503-520/2008-WZB/C-II/(EB) dated. 14-11-2008 [2008 (232) E.L.T. 210 (Tri.-Mum.)], this Tribunal had disposed of 18 Stay Applications of which two Stay Applications - one pertaining to Central Excise and another pertaining to Customs were filed by M/s. Shrishti Impex Pvt. Ltd. (M/s. SIPL, for short). 2. Vide para 27 of the said order, this Tribunal, after taking into account all the facts and circumstances, had directed M/s. SIPL to deposit a sum of Rs. 15 Crores towards payment of duty within 8 weeks from the date of receipt of the said order and on such payment, pre-deposit was waived of the balance duty and penalties imposed on M/s. SIPL and its Directors Shri Suresh Kumar Deora, Shri Harsh Deora, Smt. Rekha Suresh Deora, Shri Manikchand Sharma, Shri Prabodh Diwan and Shri Deepak Bherumal Ramchandani and recovery thereof was stayed till disposal of the appeals. The applicants were directed to report compliance on 27-1-2009 failure of which should result in dismissal of all the appeals. 3. As regards the penalties imposed on the other applicants, namely, M/s. Sonu Synfab Pvt. Ltd., M/s. Sudharsh .....

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..... . (iii) M/s. Sonu Synfab Pvt. Ltd. (iv) M/s. Suncekowa Texport Pvt. Ltd. (v) M/s. Shivarti Textiles Pvt. Ltd. (vi) Shri Ashok Kumar Sharma (vii) M/s. Pearl Agencies (viii) Shri Govind Kakda 8. Shri V.S. Nankani, ld. Advocate appeared for all the applicants and Shri K.M. Mondal, ld. Spl. Counsel appeared for the Revenue. 9. Taking-up the application of M/s. SIPL, ld. Advocate Shri Nankani submitted that he is seeking modification of the stay order only on the ground of financial hardship. He submitted that the applicant has no means to make any pre-deposit. He referred to Para 3 of the impugned order passed by the Commissioner. He said that the factory building of M/s. Sonu Synthetics Ltd. admeasuring 14300 Sq. ft. at A-5/3B, MIDC Indl. Area, Murbad has been leased out to M/s. SIPL on a monthly rent of Rs. 500/- for a period of 80 years with absolute right to use the said area at his own discretion without any interference whatsoever from the lessor. He said that the said assets and properties have been taken over by M/s. Asset Reconstruction Co. (India) Ltd. (M/s. ARCIL, for short) under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, .....

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..... Order dated 14-11-2008 is a very detailed order passed by this Tribunal. In that, the Tribunal has considered all the facts and circumstances including the financial hardship of the applicant. In this connection, he invited our attention to para 26 of the stay order. Referring to the Public Notice for sale of property by M/s. ARCIL, he submitted that the said property does not belong to the applicant. It belongs to M/s. Sonu Synthetics limited. The applicant s claim that it was taken from M/s. Sonu Synthetics Ltd. on lease for 80 years for running the factory is found to be incorrect and concocted by the Debt Recovery Tribunal. In this connection, he referred to the order of the Debt Recovery Tribunal dated 26-8-08 and took us through paras 14 to 18 of the said order dismissing its application holding that the applicant s lease agreement dated 3-7-1999 with M/s. Sonu Synthetics Ltd. is a document created only to defeat the recovery of dues payable by the debtor. Therefore, the applicant has no right over the said property. He also submitted that during the investigation, the Department also found that neither the building premises nor the plant and machinery belong to the applicant .....

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..... the penalties imposed on them by the Commissioner. Penalty imposed on them is only Rs. 1 Lakh each except for Shri Govind Kakda on whom penalty imposed is Rs. 3 Lakhs. Therefore, the quantum of pre-deposit is not much. Moreover, they have not pleaded any financial hardship. Therefore, their appeals do not deserve to be restored. He also relied upon the judgment of the Hon ble Supreme Court in the case of Vijay Prakash D. Mehta v. Collector of Customs reported in 1989 (39) E.L.T. 178 (S.C.) holding that pre-deposit of penalty is obligatory except in cases of undue hardship. 11. We have duly considered the submissions of both the sides. We find that by the impugned order, the Commissioner has demanded total duties of Rs. 33,09,14,854/- from M/s. SIPL and imposed an equal amount of penalty on it. The Commissioner has also imposed varying penalties on its different Directors/Ex-Directors which totally come to Rs. 2.65 crores. We also find that vide stay order dated 14-11-2008 this Tribunal, after taking into consideration all the facts and circumstances of this case including the financial hardship, ordered the applicant to deposit a sum of Rs. 15 crores towards payment of duty within .....

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..... owing actual financial health of the company. We find that in the case of M/s. Benara Valves Ltd. v. Commissioner reported in 2006 (204) E.L.T. 513 (S.C.), the Hon ble Apex Court had an occasion to deal with the similar situation regarding undue hardship to the assessee. In Paras 11 to 15, the Hon ble Apex Court has held as follows : 11. Two significant expressions used in the provisions are undue hardship to such person and safeguard the interests of revenue . Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35(F). One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka and Ors. (AIR 1994 SC 923) that under Indian conditions expression Undue hardship is normally related to economic hardship. Undue which means something which is not merited by the c .....

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..... ll also result in dismissal without any further notice to them. 18. We have also considered the remaining eight applications for restoration of appeals filed by M/s. Sudarshan Texport Pvt. Ltd., M/s. Kakda Impex (I) Pvt. Ltd., M/s. Sonu Synfab Pvt. Ltd., M/s. Suncekowa Texport Pvt. Ltd., M/s. Shivarti Textiles Pvt. Ltd., Shri Ashok Kumar Sharma, M/s. Pearl Agencies and Shri Govind Kakda and dismissed by this Tribunal vide its Order No. A/60-77/09/EB/C-II dated 27-1-2009 for non-compliance of the stay order dated 14-11-2008. We find that these applications, which are identically worded, were filed on 23-3-2009. It has been stated in the applications that the applicants wanted to file Misc. Applications for modification of the stay order and for that purpose, one Shri Brijmohan Lalchand Kakda carried their applications to the Asstt. Registrar of the CESTAT Office on 24-1-2009, but the same were not accepted on the ground that the matter was listed before the Tribunal on 27-1-2009. On 27-1-2009, when he came to the Tribunal again, he found that before he reached the Tribunal, the matter was already decided. Hence, he could not hand over the applications. An Affidavit has been filed by .....

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