J.K. PHARMACEUTICALS LTD. Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at .this stage. Accordingly, after dispensing with predeposit, we take up the appeal.

(2.) THE original authority had passed an adverse order against the assessee, whereby a demand of duty of over Rs. 16.00 lakhs was confirmed under Section 11D of the Central Excise Act and interest on the said amount was also charged under Section HDD. Aggrieved, the assessee preferred an appeal to the Commissioner (Appeals) and also filed therewith an application for waiver of predeposit and stay of recovery under Section 35F of the Central Excise Act. The appellate authority, after considering the stay application and hearing the assessee, passed an interim order dated 7.8.2004 directing the party to predeposit Rs. 9.00 lakhs (out of over Rs. 16.00 lakhs) on or before 31.10.2004 and. to report compliance on 1.11.2004. On the appointed date, there was neither any evidence on record of predeposit of the amount nor any representation for the party. However, a petition filed by the party for modification of the above order was seen on record and the same was examined by the Commissioner (Appeals), who found that there was no new ground in the application for modification of the order. Accordingly, learned Commissioner (Appeals) dismissed the assessee's appeal for non -compliance with Section 35F. Hence the present appeal.

(3.) WE have heard the authorized representative of the company and also learned Jt. CDR. It appears from the records and the submissions that the demand of duty is based on the annual report of the company for the year ended September 2000, which indicates excise duty amount of Rs. 1,194.86 lakhs under the head "Expenditure" in the Profit and Loss Account for the said year. The department found that only a lesser amount was paid as duty by the assessee for the said period as per the excise records. Hence the demand of differential duty under Section 11D. The representative of the company has submitted that the amount shown as excise duty under the head "Expenditure' in the Profit and Loss Account for the relevant period does not reflect actual payment of duty on the clearances of goods effected during that period. It is submitted that the said amount has been shown in keeping with the accounting principles adopted by the Chartered Accountant of the company. However, any certificate of the Chartered Accountant to such effect has not been brought on record. The representative of the company further points out that for the year 1998 -99, the annual report had shown a lesser amount of excise duty in the Profit and Loss Account than the duty actually paid as per the excise records. On the other hand, for the year 2000 -01, the annual report showed a higher amount of excise duty than the amount of duty actually paid as per the excise records, as in the present case pertaining to the year 1999 -2000. However, any differential demand of duty as in the present case has not been raised by the department for the year 2000 -01. It is further submitted that the company wound up its manufacturing activity in 2004 and is presently in deep financial crisis as evidenced by the annual report for the year 2004 -05. We have perused this annual report and have come across the figure 14243.92 rupees in lakhs against the entry Profit and Loss Account, as on 30.9,2005. The representative of the company has not been able to show that this amount represents loss. Learned Jt. CDR has also referred to this annual report in his endeavour to rebut the plea of financial hardships.