BARIJORIWALAS ROLLING MILLS PVT. LTD. Vs. THE COMMISSIONER

JUDGEMENT

(1.) D.B. Excise Appeal No. 2/2014, has been filed against the order of the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (for short, 'the CESTAT'), dated 31.12.2013, by which it allowed the modification application filed by the appellant, to modify the stay order dated 23.10.2012, whereby the appellant was required to deposit 25% of the duty demand, and to deposit Rs. 2 lakh towards penalty, imposed on the Director, as condition of hearing the appeal. The modification application was rejected on the ground that a major part of the duty stands confirmed against the appellant on the basis of consumption of electricity. The Revenue conducted certain investigations in the factory and found that average power consumption in the manufacture of similar product was 102.09 unit of electricity per MT. By applying the same ratio, the Revenue entertained a view that the appellant has accounted less production and accordingly confirmed the demand. The CESTAT did not accept the argument that the electricity consumption cannot be the basis for determining production, and that the order passed by the Commissioner to drop the demand in the subsequent case, cannot be taken to be a good ground, as in those cases also, the proposal to confirm the demand of duty was based upon the entries made in the documents recovered from M/s. Nirmal Inductomelt Pvt. Ltd., as also on the basis of investigation conducted in the factory of M/s. Shree Sharma Steel Re-Rolling Mills. It was found that the evidence available in the present case, as also the one which was before the Commissioner in the other case, was similar in nature.

(2.) The D.B. Excise Appeal No. 26/2014, filed by the appellant, arises out of final order passed by the CESTAT, dated 26.05.2014, by which the appeal was dismissed on the ground that there was no compliance of the order of pre-deposit, dated 23.10.2012, and no proof of pre-deposit was filed. The substantive demand for excise duty, interest and penalties, assessed on 23.10.2012, stand unrealized and even 25% of the duty and Rs. 2 lakh as penalty, directed to be pre-deposited by the appellant and its Director on 23.10.2012, remained un-remitted. The appeal was thus dismissed by CESTAT on the ground of non-compliance of the order of pre-deposit.

(3.) It is submitted by learned counsel appearing for the appellant-Company that the Company has a strong prima-facie case to succeed in appeal, and that the financial position of the Company is not such that it could have deposited 25% of the amount as pre-deposit and Rs. 2 lakh by its Director. An amount of Rs. 5 lakh, which was directed to be deposited by the CESTAT earlier before modification was made in pursuance to the application filed by the Department, has been deposited, and is lying in deposit with the Department. The deposit of 25% of demand will cause undue hardship to the appellant-Company, making the remedy illusory. The non-availability of funds to deposit will take away the remedy of appeal before CESTAT, which has fair chances of success.