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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
M. Gouri Shankar Murthy, I.J. Rao, JJ.
Atma Steels (P.) Ltd. -Appellant
Versus
Collector of Central Excise & Customs, Chandigarh -Respondent
Nos. ED (SB) (T) A. 2/82-NRB 68/83
Decided On : 11-10-1982
P.P. Rao,Y. Gupta
M. Gouri Shankar Murthy, Member (J)
1. The questions that arise for consideration, in consequence of the instant application for modification of the earlier order of the Tribunal dated 15.12.1982 refusing to stay the recovery of a penalty in a sum of Rs. two lakhs, are--
(a) (i) whether the provision for a deposit of the penalty pending a hearing of an appeal in Sec. 35(F) of the Central Excises
(ii) if so, was the said provision relevant or applicable, on its terms, to a consideration of the stay prayed for?
(b) (i) whether the aforesaid order is interlocutory in nature assuming it to be one under Sec. 35(F) or otherwise?
(ii) if so, can it be varied or modified or reversed on an application for that purpose and in what circumstances;
(c) are there sufficient grounds to justify modification or reversal of the said order as prayed for in the instant application?
The facts in so far as material are--
(a) an appeal before the Tribunal was filed on 21.10.1982 against an order of the Collector, Central Excise and Customs, Chandigarh dated 24.7.1982, by which--
(i) duty in two sums of Rs. 2,11,669.32 and Rs. 28,957.50; (The proforma attached to the Memorandum of Appeal).
(ii) confiscation and consequent redemption fine in a sum of Rs. 80,000; and
(iii) penalty in a sum of Rs. 2,00,000/-, were levied upon the Appellant. Of these amounts while duty was paid in a sum of Rs. 2,11,669.32 only, the rest were not.
(b) an application purporting to be one under R. 220E of the Central Excise Rules was also filed on the same day for stay of recovery of the penalty only--and not for dispensing with the deposit thereof in terms of S. 35(F) of the Central Excises
(i) the seizure of the goods and their confiscation under Sec. 110 of the Customs Act in so far as it was made applicable in matters relating to Central Excise were bad in law;
(ii) the demand for duty having been complied with had become infructuous;
(iii) contraventions attributed to the Appellant were technical in nature;
(iv) the levy of penalty in a sum of Rs. 2,00,000/- was not only excessive but retributive;
(v) there can be no risk or apprehension that the amounts levied become irrecoverable as the Appellant possessed substantial assets; and
(vi) "the furnishing of a bank guarantee would cause undue hardship to the Appellant.
2. It is of significance to notice at this stage itself, that--
(a) some part of the duty in a sum of Rs. 28,957.50 still remains unpaid;
(b) the application was not one to dispense with the deposit of penalty or the unpaid duty in terms of Sec. 35(F) of the Central Excises and Salt Act, 1944;
(c) it was only stay of recovery of the penalty that was prayed for and not the as yet unpaid duty;
(d) in fact, the adjudication was commenced and the appeal concluded before the aforesaid provision became operative;
(e) there is no averment in the application to the effect that the payment of the penalty would cause undue hardship; on the contrary, the Appellant possessed substantial financial assets; it was only the guarantee that may be required to secure the penalty that would cause undue hardship.
3. The aforesaid application was duly heard and rejected on 15.12.1982 by our learned predecessors in the Northern Regional Bench of the Tribunal largely on a construction of the expression "undue hardship" according to proviso to Sec. 35(F) and in terms thereof. It would appear from para 6 of the said order that there was no clear answer from the consultant appearing for the Appellant to a query concerning a bank guarantee towards security for the amount to penalty. Lower down in para 10 of the order it was observed that from the stay application, it did not appear that the appellant was willing to furnish a Bank Guarantee.
