TMI Blog2014 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... no reduction in the price of SS Billets manufactured by other manufacturers. It cannot be said that the appellant have been such a strong prima facie case in their favour which is likely to result in their full exoneration. - appellant directed to pay an amount of ₹ 3 Crore within a period of eight weeks. - stay granted partly. - Appeal No. E/1749/2009-EX[DB], Application No. E/Stay/1396/2007 - STAY ORDER NO: 60217/2013 - Dated:- 20-12-2013 - Shri D.N. Panda and Shri Rakesh Kumar, JJ. For the Appellant : Sh. Prabhat Kumar, Advocate For the Respondent : Sh. V.P. Batra, DR ORDER Per Rakesh Kumar:- The facts leading to filing of this appeal and stay application and hearing of this matter for de-novo decision on stay application are, in brief, as under:- 1.1 The appellant are a manufacture of Stainless steel billets (hereinafter referred to as S.S.Billets), other Alloy Steel billets (hereinafter referred to as OAS Billets), stainless steel flats and steel castings. The period of dispute in this case is from March 94 to Nov. 95 and during this period Sh. Anil Rathi, Sh. Pradeep Rathi and Sh. Arun Rathi were directors of the appellant company and Sh. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 42000 to 44000 Per MT, during 1994- 1995 was Rs, 44000 to47000 Per MT and during 1995-96 was Rs. 45000 to 48000 Per MT. (ii) Statements of the manufacture of SS ingots and SS flats- M/s. Sahu Refrigeration Industries; M/s. D.P. Process(p) Ltd. M/s. G.D. Ferro Alloys Pvt. Ltd.; M/s. Super Metals Pvt. Ltd. etc. which shows that market rate of SS Flats of the Appellant have fluctuated in a narrow range of Rs. 32000 to 36000 Per MT during 1993-94, 1994-95 and 1995-96. 1.3 Third allegation against the appellant company is wrong availment of Modvat Credit of Rs.1,16,21,252/- during period from April93 to 17th May95. This Modvat Credit is sought to be denied on grounds that credit has been availed in respect of inputs which were not actually received and in some cases the credit was taken on the basis of documents which were not valid documents for taking the credit. 1.4 This matter was adjudicated by the Commissioner vide order-in-original No.29/Comm./MI/97 dt.25.11.97 by which the Commissioner:- (a) confirmed the duty demand of Rs. 6,97,62,102/- against the Appellant on account of under valuation and clearance of S.S. Billets in the guise of OAS Billets ; (b) confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be redeemed on redemption fine of Rs.1Crore. Besides this, penalty of Rs. 50 Lakh each under Rule 209-A of Central Excise Rules was imposed on Sh. Anil Rathi, Sh. Pradeep Rathi and Sh. Arun Rathi and penalty of Rs. 5 Lakh was imposed under the same Rule on Sh. M.L. Aggarwal. It is against this order of the Commissioner that this appeal has been filed by the Appellant company along with stay application. 1.7 The stay application filed by the appellant was disposed of by the Tribunal vide stay order dt. 17.07.07 by which the appellant company was directed to deposit an amount of Rs.2 Crore within time period specified in the order for compliance with the provisions of Section 35F. The appellant, however, filed a Writ Petition against stay order dt. 17.07.07 before the Hon ble Allahabad High Court, but their writ petition was dismissed. Thereafter the appellant company filed SLP before the Hon ble Supreme Court against the Hon ble High Court s order and the Apex Court vide order dt. 12.10.07 dismissed the SLP with liberty to the appellant to move Hon ble High Court for Review of its earlier order. The appellant company, in pursuance of the Apex Court s order, filed Review Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the budget of 1994 was fully known to the Department, as the price lists were being filed and RT-12 returns were also being filed regularly along with the sales invoices, that the assessment for this period was on provisional basis, that merely on the basis of the price of such goods sold by other manufacturers or prevailing price of SS flats or SS Patta/Patti, as mentioned by utensil manufacturers, newspaper report etc., it cannot be concluded that the Appellant company had under declared the sale price of S.S. Billets, that no comparison could be made of the S.S.Billets manufactured by the Appellant company with the S.S.Billets manufactured by other manufacturers, unless the material characteristics were verified for comparison, that the appellant had submitted 52 invoices of lower price at which the S.S.Billets have been sold by other manufacturers but those invoices were deliberately ignored, that there were genuine reasons for reduction of price of S.S.Billets after the budget of 1994, as custom duty on imported S.S.Billets had been reduced substantially, that in any case, extended period is not invokable, that in view of the above, duty demand of Rs. 4,24,54,960/- based on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al hardship which is clear from the fact that the appellant had filed application before the BIFR and the same had been admitted, that when the Department has no case on merit and the appellant are facing financial hardship, the requirement on pre-deposit of duty, Modvat Credit demand and penalty for compliance with provisions of Section 35F would cause undue hardship and hence the same may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 4. Sh. V.P. Batra, the learned DR, opposed the stay application by reiterating the findings of the Commissioner in the impugned order and pleaded that the test reports of the chemical examiner in respect of OAS Billets during Aug. 93 to Feb.94. Period clearly show that chromium content was more than 10.5% and hence the billets being sold by the Appellant as OAS Billets were actually S.S. Billets, that the statements of customers of the appellant company buying S.S. Patta/Patti from them and also statements of other manufacturers of S.S. Billets clearly show that the prevailing price of S.S flats during period of dispute was Rs. 33000-34000 PMT and hence the price of S.S. Billets from which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aling against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such persons , the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of revenue. 6. In terms of the above provisions while filing of appeal against an order, the appellant is required to pre-deposit duty demand confirmed against him, interest thereon and penalty imposed unless the duty demand along with interest is in respect of goods which are under control of the Department. There is no dispute that the goods in respect of which the duty has been demanded are not under the control of the Department and had earlier been cleared. Unless the duty demanded plus interest and the penalty imposed is deposited, the appeal cannot heard, as pre-deposit of the duty demand, interest and penalty prior to hearing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e requirement of pre deposit:- (i) prima facie case. (ii) balance of convenience (iii) Irrepairable loss. (d) Balance of evidence must be clearly in favour of making Interim Order and there should not be no slightest indication or likely hood of prejudice to the interests of the Revenue. (e) When the Tribunal has decided to grant waiver from pre-deposit conditions have to be imposed to safeguard the interests of the Revenue and this is an imperative requirement . 7.1 Hon ble Delhi High Court in case of Shri Krishna Vs. Union of India, reported in 1998 (104) ELT-325 (Del) has held that if the appellant has such a strong prima facie case as is most likely to exonerate him from the requirement of payment of duty, requirement of pre-deposit of duty, interest and penalty would cause undue hardship. A Corollary to this principle would be that when the situation is reverse i.e. the assessee does not have prima facie case, the pre-deposit must be insisted. Thus when the issue involved in the appeal stands decided in favour of Revenue by some judgment of Apex Court, High Court and Tribunal or on the basis of evidence on record, there is strong prima facie case in favour of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit of Rs. 35,53,233/-). 8.2 Coming to the first component of duty demand of Rs. 2,72,07,142/-, the same in respect of the goods cleared by the appellant as OAS Billets during period from 05.08.93 to Feb. 94 and from March 94 to July 94 In terms of Chapter Notes 1(e) and 1(f) of Chapter 72 of the Central Excise Tariff, while Stainless Steel is Alloy Steel containing by weight 1.2% or less of Carbon and 10.5% or more of Chromium with or without other elements, Other Alloy Steel is the steel not complying with the definition of Stainless Steel and containing by weight of one or more of the elements namely Aluminium, Boron, Chromium, Cobalt, Copper, Lead, Magnesium, Nickel, Niobium, Silicon, Titanium, Vanadium and Zirconium in the proportions mentions in the chapter note 1(f). The Chromium content of Other Alloy Steel s per the Chapter Note 1(f) is required to be 0.3% or more but less than 10.5%. While according to the appellant the Chromium content of the alloy steel being manufactured by them was less than 10.5%, according to the Department based on test report of the CRCL, the content of Chromium in the alloy steel manufactured by them and declared as Other Allow Steel wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that on the question of under valuation on which duty demand of Rs. 4,25,54,960/- is based, the appellant have a strong prima facie case in their favour., as prima facie for March 94 to Nov. 95 period, there is no justification for drastic reduction in the price of SS Billets when the price of down street production S.S Flats and SS Pattas/Pattis had not decreased and there was no reduction in the price of SS Billets manufactured by other manufacturers. 8.3. As regards Modvat Credit demand of Rs.1,00,40,124/- the bulk of the demand of Rs. 57,64,829/- is based on the allegation that the goods covered under the documents on the basis on which the credit have been taken had not been received. Here also the nature of evidence is such that allegation cannot be summarily dismissed and requires in depth examination. 9. In view of the above discussion regarding the assessment of evidence in support of the allegation against the appellant, it cannot be said that the appellant have been such a strong prima facie case in their favour which is likely to result in their full exoneration. Therefore, in accordance with the criteria prescribed in this regard in various judgments of the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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