TMI Blog2013 (2) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the date of hearing the stay application on 27-9-2011. The appellant deliberately suppressed the facts. Truth came out only when discovery process under Section 129C(7) and (8) of the Customs Act, 1962 was resorted to. Dilatory tactics was followed to state the truth to the Courts and revealed in piecemeal abusing process of law. They did not come out with clean hands to deserve consideration. Also they are not able to show how the statutory obligation of pre-deposit during pendency of appeal shall be dispensed or granted concession when they had exclusive knowledge of their financial condition/status due to attachment from the beginning. It was their duty to candidly disclose all their assets, movable and immovable including those in respect of which orders of attachment was passed by the quasi judicial forum. - The facts and circumstances clearly proves that the appellants deliberately suppressed the facts relating to their financial condition during hearing of stay application at the original stage which guided the Appellate Tribunal to order no total exemption from pre-deposit. - Decided against assessee. - E/2176-2177/2009-EX(BR) - Misc. Order No. MO/57085/2013-EX(DB) - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispose of same and deposit amount in question. Accordingly, he submits that the Revenue to be directed to release the property so as to enable him to dispose the same in the market and to deposit amount in question. 5. Learned SDR appearing for the Revenue submits that as demand of duty in the present case, is to the tune of ₹ 28 crores and value of the property is only to the tune of ₹ 17 crores, the same should be allowed to be retained by the Revenue so as to safeguard their interest. The appellant should be further directed to make pre-deposit of ₹ 6 crores, in addition to retention of the property. 6. After appreciating the submissions made by both sides, we find that the fact of attachment of the property by the Revenue was not brought to the notice of the Bench at the time of disposal of the stay petition on 27-9-2011. As such, the direction of the Tribunal to deposit an amount of ₹ 6 crores is without considering the fact of attachment. In such scenario, we find no merits in the department s request for continuance of attachment and direct the appellant to deposit an amount of ₹ 6 crores. It has to be kept in mind that the Revenue has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve caused revenue loss through fraudulent documents showing duty payments. The applicants were in activities requiring minimal investment in plant and machinery, a set up suited for vanishing quickly after committing fraud. As on date it is informed that the applicants have closed down. 9. There is a confirmed duty arrear of about ₹ 26 crores from the applicants. The Tribunal has passed an order that ₹ 6 crores should be pre-deposited for hearing their appeal. Before the issue of the order for pre-deposit, Revenue has issued a notice of attachment for four pieces of immovable properties of approximate value of ₹ 2.25 crores, ₹ 2.30 crores, ₹ 8.50 crores and ₹ 4 crores totalling to ₹ 17.05 crores. 10. Applicants have filed an application for modification of stay order requesting that the attached property may be considered as sufficient security for hearing the appeal. In the modification application there is an undertaking by the applicants not to dispose of properties worth at least ₹ 8 crores. So I do not understand the need to withdraw the notice of attachment for all the properties when there is an undertaking from the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt and in the light of new facts. 14. Now I would like to point out that the Tribunal has enough powers to impose conditions that are necessary to safeguard the interest of Revenue as may be seen from the first proviso to Section 35F which reads as under : 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 person, 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 interests of revenue. 15. Since the applicants state they have no other assets it is very obvious that the amounts due to the Government are at serious risk. So there is every reason to exercise the discretion very carefully and impose suitable conditions. 16. It appears that the power to issue this notice is taken from Section 11DDA of Central Excise Act. It is also possible that the power is taken from Section 12 of Central Excise Act read with Section 142 of the Customs Act and Rules made thereunder which is independent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isposal of any property with safeguard that money realized is deposited to Revenue to the extent of ₹ 6 crores. Such an action may help the Revenue in warding off legal proceedings blocking swift action needed in the remaining short period of about one year for which attachment may survive. But this direction is only by way of an advisory and I am not expressing any view on any legal issue that is involved in the matter, in this paragraph. Sd/- (Mathew John) Member (Technical) POINTS OF DIFFERENCE OF OPINION 19. In the facts and circumstances of the case and the applicable legal provisions, - (a) Whether it is justified to revoke the notice of attachment in respect of all the four items of properties at this stage when the stay order has not taken effect at all? (b) Whether in the facts and circumstances of the case it will be better to order release of properties only to the extent necessary to raise Rs. Six crores at this stage? (c) Whether it will be appropriate to allow the Revenue to take action to realize ₹ 6 crores by completing the process of attachment and sale of such property? (Pronounced in Court on 24-2-2012) S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mine each other s stand and get proper instructions for hearing. Matter shall be heard on 4th May, 2012 without further adjournment. Sd/- (D.N. Panda) Member (Judicial) 25 . [Per : D.N. Panda, Member (J)]. - Present reference is against the order pronounced on 24-2-2012 by the Division Bench giving rise to following points of difference arising at the stage of hearing of Misc. Application No. 1034/2011 filed on 28-12-2011 by the appellants pursuant to the direction of Hon ble High Court of Punjab Haryana in CWP No. 23811 of 2011 disposed on 21-11-2011 : (a) Whether it is justified to revoke the notice of attachment in respect of all the four items of properties at this stage when the stay order has not taken effect at all. (b) Whether in the facts and circumstances of the case it will be better to order release of properties only to the extent necessary to raise Rs. Six crores at this stage. (c) Whether it will be appropriate to allow the Revenue to take action to realize ₹ 6 crores by completing the process of attachment and sale of such property. 26. Initially stay applications of the appellants registered as E/S/2246-47 of 2009 aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the above Misc. application by the Division Bench on 9-2-2012 and on appreciation of submissions of both sides it was found that the fact of attachment of property by Revenue was not brought to the notice of the Bench at the time of disposal of stay petition on 27-9-2011. 31. Learned Judicial Member in para 6 of the order dated 9-2-2012 which is under reference observed that the department s request for continuance of attachment was devoid of merit when appellant was to be directed to deposit an amount of ₹ 6 crores while there was no modification application by Revenue against the earlier stay order passed by Tribunal. While it was proposed that there was no need to modify condition of deposit, but Revenue was intended to be directed to release the property of the appellant within a period of 4 weeks from the date of the receipt of the order and the appellant to deposit ₹ 6 crores within a period of 4 weeks thereafter. 32. Against above proposition of learned Judicial Member, learned Technical Member was of the view that there was limited conflict between attachment notice issued by the Commissioner under Rule 4 of Customs (Attachment of Property of Defaulte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect interest of Revenue: So I am of the view that Tribunal should order release of the properties only to the extent as is needed for complying with the order and the property should be alienated with the permission of proper officer as envisaged in Rule 9 of the said Rules. Revoking the notice for all properties should be considered only after the order for pre-deposit is complied with. To this extent I differ from the order recorded by Member (Judicial). I am also of the view that since the stay order has not taken effect the Revenue should be allowed to complete the process of attachment and its sale to realize ₹ 6 crores. [Emphasis supplied] 34. While hearing the reference, grievance of the appellant was that at least property worth ₹ 6 crores may be released to raise money for meeting the requirement of pre-deposit ordered. To such proposition there was serious objection by Revenue submitting that no attachment should be released and attached property should be sold to realize the amount directed by pre-deposit order. Revenue s reliance was on the letter C. No. V(Review) L.D.H./MISC./C.O./2009, dated 3-2-2012 of Ludhiana Commissionerate to submit that while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction of pre-deposit. In this regard by an Affidavit dated 22-5-2012, it was explained by appellant that following four properties are under attachment by the Revenue : Khewat of Jamabandi Khatoni No./Patti Hadbas No. Khasra No. Details of property (as per farad) Approx. value Particulars 352 of years 2003-04 299 262 489 488 Sq. yards 2.25 Crores Vill. Dhaba, Teh. Distt. Ludhiana 252 of years 2003-04 299 262 489 512 Sq. yards 2.30 Crores -do - 561, 562, 563 of year 2004-05 607, 608, 609 179 60 + 61 2610 Sq. yards 8.50 Crores Vill. Mundian Kalan, Teh. Distt. Ludhiana 561, 562 of year 2004-05 607, 608 179 60+61 1200 Sq. yards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of appellants is that they are facing huge financial crisis. But they have miserably failed to make out a case, which could justify the reasons how properties under attachment shall be adequate to protect interest of Revenue during pendency of appeal when the very attachment proceeding is quite different and not under appeal before Tribunal and the appellant chose not to place such fact before the Tribunal at the first stage of hearing of stay petition while that was within its exclusive knowledge and not instructed to their Advocates. It is also significant to note that value of the property under attachment is insufficient against the debt of ₹ 80,44,47,396/- due to the State as on the date of hearing the stay application on 27-9-2011. The appellant deliberately suppressed the facts. Truth came out only when discovery process under Section 129C(7) and (8) of the Customs Act, 1962 was resorted to. Dilatory tactics was followed to state the truth to the Courts and revealed in piecemeal abusing process of law. They did not come out with clean hands to deserve consideration. Also they are not able to show how the statutory obligation of pre-deposit during pendency of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Undue hardship is caused when the hardship is not warranted by the circumstances. (3) For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. (4) The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. (5) The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interests of the Revenue. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate conditions as required to safeguard the interests of the Revenue. [Emphasis supplied] 43. Above view was reiterated in Indu Nissan Oxo Chemicals Industries Ltd. v. Union of India - (2007) 13 SCC 487 = 2008 (221) E.L.T. 7 (S.C.) by considering proviso to Section 129E o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king modality at the interim stage as has been held by Apex Court in Dunlop India Judgment (supra) by the referring Bench sitting in Appellate side since various conflicts in opinion are apparent from the referral order when Paras 6 and 17 are read. 49. Application No. E/M/492/2012 filed by Revenue subsequent to hearing on the matter sought to be decided by the third Member. This application seeks more remedy for Revenue than what was recorded by either of the Members of the original Bench. 50. As is seen from the above, the reference stand returned to the original Bench for passing orders by evolving working modality. Even after a lot of deliberations, we have not been able to record a final order as the point of difference referred to third Member for his opinion do not stand answered by him. Accordingly, the original Bench is finding it difficult to record the final majority order. We accordingly, place the file before Hon ble President for further action and suitable instructions. Sd/- Mathew John Member (Technical) Sd/- Archana Wadhwa, Member (Judicial) 51 . [Per : D.N. Panda, Member (J)]. - Against reference made by order dated 14-8-2012 raisin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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