Customs, Excise and Gold Tribunal - Delhi
Uptron India Ltd. vs Collector Of Central Excise on 15 December, 1994
Equivalent citations: 1995(76)ELT77(TRI-DEL)
ORDER
Harish Chander, President
1. By the present application, the appellants have made a prayer for dispensing with the duty amount of Rs. 3,62,871 /-. Shri H.S. Asthana, the learned Consultant has appeared on behalf of the appellants. He pleaded that the appellants are manufacturer of Transmission Receivers and have claimed assessment under Heading 85.25 and of Cadmium Batteries under Heading 85.29 whereas the Revenue has assessed the same under Heading 85.27. He pleaded that classification list filed by the appellants was duly approved on 21st November, 1992 and the Show Cause Notice is dated 4th May, 1993 and period involved is October, 1992 to March, 1993. He pleaded that since the classification list has been approved, a stay should be granted. He also pleaded that the appellants' unit is a sick unit and is under BIFR. He pleaded for grant of stay.
2. Shri Somesh Arora, the learned JDR who is present on behalf of the respondent pleaded that prima facie Revenue has got a good case on merits as the goods in dispute merit classification under Heading 85.27. He pleaded that Revenue's interest should be protected.
3. We have heard both the sides and have gone through the facts and circumstances. The goods in dispute are Transmission Receivers and Cadmium Batteries. For proper appreciation, Tariff Headings 85.25, 85.27 and 85.29 are reproduced below :-
"85.25 Transmission apparatus for radio-telephony, radio-telegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras."
"85.27 Reception apparatus for radio-telephony, radio-telegraphy or radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock."
"85.29 Parts suitable for use solely or principally with the apparatus of heading Nos. 85.25 to 85.28."
The goods in dispute are 'Uptron Radio Paging System' the catalogue of which appears on Page 17 of the paperbook. From the back of Page 17, the description of the catalogue is reproduced below :-
"UPTRON Radio Paging System is used to draw the attention of some individual or group of individuals and to convey specific messages to them. This system is useful in Industries, Business Establishments, Hospitals, Security Organisations and Hotels.
UPTRON Radio Paging System comprises the following equipment:
1. Encoder E-891
2. Transmitter FL-1026 and G.P. Antenna
3. Pocket Bell or Paging Receiver Type FRC-3"
4. A perusal of the same shows that entry in 85.27 appears to be appropriate. Since the matter is sub judice, further observations at this stage will not be proper. We were told by the appellants that it is a unit which has been declared sick under BIFR and as such, the amount should be stayed. This Tribunal had occasion to deal a similar matter in the case of Maharashtra Tubes Ltd. v. Collector of Customs, Bombay, reported in 1994 (1) RLT 23 (CEGAT-A). Relevant extract from the said judgment is reproduced below :-
""Now we come to the appellant's plea for BIFR. For the proper appreciation of the legal position, Section 3(l)(a), Sections 22 and 25 of the Sick Industrial Companies (Special Provisions) Act, 1985 are reproduced below :-
[Para 9] "In the matter before us an appeal is pending before the Hon'ble Supreme Court in the appellant's own case. Hon'ble Supreme Court in the case of Maharashtra Tubes Ltd. v. State Industrial & Investment Corporation of Maharashtra Ltd. and Anr., reported in 1993 (1) Judgments Today 310 had held as under :-
Section 22(1) [short] of the irrelevant part provides that where an appeal under Section 25 then, notwithstanding anything contained in any other law, no proceedings for the winding up for the industrial company or for execution, distress or the like against any of the properties of the industrial company or for appointment of a Receiver in respect thereof shall lie or be proceeded with further, except with the consent of the BIFR or, as the case may be, the Appellate Authority. The purposes and object of this provision is clearly to await the outcome of the reference made to the BIFR for the revival and rehabilitation of the sick industrial company. The word 'or the like' which follows the words 'execution' and 'distress' are clearly intended to convey that the properties of the sick industrial company shall not be made the subject matter of coercive action of similar quality and characteristic till the BIFR finally disposes of the reference made under Section 15 of the said enactment. The legislature has advisedly used an omnibus expression 'the like' as it could not have conceived of all possible coercive measures that may be taken against a sick undertaking. The action contemplated by Section 29 of the 1951 Act is undoubtedly a coercive measure directed at the take over of the management and property of the industrial concern and confers a further right on the Financial Corporation to transfer by way of lease or sale of properties of the said concern and any such transfer effected by the Financial Corporation would vest in the transferee all rights in or to the transferred property as if the transfer was made by the owner of the property. So also under the said provisions the Financial Corporation will have the same right and powers with respect to goods manufactured [or] produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods. It is, therefore, obvious on a plain reading of Section 29 of the 1951 Act that it permits coercive action against the defaulting industrial concern of the type which would be taken in execution or distress proceedings; the only difference being that in the latter case the concerned party would have to use the forum prescribed by law for the purpose of securing attachment and sale of property of the defaulting industrial concern whereas in the case of a Financial Corporation that right is conferred on the creditor corporation itself which is permitted to take over the management and possession of the properties and deal with them as if it were the owner of the properties. If the corporation is permitted to resort to the provisions of Section 29 of the 1951 Act while proceedings under Sections 15 to 19 of the 1985 Act are pending it will render the entire proceedings nugatory. In such a situation the law merely expects the Corporation and for that matter any other creditor to obtain the consent of the BIFR or, as the case may be, the Appellate Authority to proceed against the industrial concern. The law has not left them without a remedy. We are, therefore, of the opinion that the word 'proceedings' in Section 22(1) cannot be given a narrow or restricted meaning to limit the same to legal proceedings. Such a narrow meaning would run counter to the scheme of the law and frustrate the very object and purpose of Section 22(1) of the 1985 Act."
A perusal of the same shows that there can be a bar from the recovery proceedings. But so far as the present appellants before us are concerned, they have made a prayer for dispensing with the pre-deposit of the duty and penalty amounts". [para 9] "A perusal of the same shows that the appellant is disputing the pre-deposit of the penalty and duty amounts. Discretion has been given to dispense with the same if the Tribunal is satisfied that there is undue hardship. Hon'ble Supreme Court in the case of Navin Chandra Chhotelal v. The Central Board of Excise & Customs, New Delhi and Ors. reported in AIR 1971 SC 2280 had held that the right given by the statute for filing an appeal is conditional right and if the appellant does not satisfy the condition, it cannot be said that the Tribunal must dispense with the pre-deposit".
"The Tribunal had followed the same in the case of EAP Industries Ltd. v. Collector of Central Excise, reported in 1993 (68) 851 (Tribunal). We have duly considered and given our thought to the decision of the Hon'ble Supreme Court as well as the earlier decision of the Tribunal. We feel that the correct view will be that where a unit has been declared as a sick unit by BIFR or an appeal under Section 25 of the Sick Industrial Companies (Special Provisions) Act, 1985 is pending before the appellate authority, there can be a bar for recovery, but in the matter before us, we are not ordering any recovery. We are passing this order in response to an application by the appellants for the waiver of the pre-deposit of the duty and penalty amounts. The Tribunal had occasion to deal with similar situation where the unit was declared a sick unit by BIFR whether the pre-deposit should be dispensed with or not". [Para 9] "We have got full respect for the judgments of the Hon'ble Supreme Court, but all these are for the purposes of recovery. The right of filing ah appeal, as observed earlier, is a conditional right. Where a unit has been declared as a sick unit by BIFR or an appeal is pending before a higher forum, there is only bar of recovery. Where the amount is to be deposited by the assessee, suo motu or otherwise, the ratio of Shree Vallabh Glass Works Ltd.'s decision as well as in the appellant's own case which is pending before the Supreme Court will not apply"."
Hon'ble Supreme Court in the case of M/s. Chandigarh Paper Board Mills (P) Ltd., Chandigarh v. C.E.G.A.T. and Ors. reported in 1994 (70) E.L.T. A151 had held as under :-
"Issue notice.
The petitioner-Mills state that they have already deposited Rs. 50,000/- on 8th of February, 1994 out of the amount of Rs. 3 lacs. If the petitioners deposit the amount of Rs. 2,50,000/- at the rate of Rs. 50,000/- per month on or before the 10th of each month in five monthly instalments, the appeal will be taken up for hearing by the Tribunal. The first of such instalment to be paid on or before the 10th April, 1994. No defaults will be permitted.
There will be an ad interim stay of the impugned order of the High Court in the meanwhile."
"The present appeal raises the following questions :-
(a) Whether, the respondents were justified in directing the petitioner to deposit Rs. 3 lakhs and to give bank guarantee for the rest of the amount, in spite of the fact that the petitioner's unit was a declared Sick Industrial Unit under the Sick Industrial Companies (Special Provisions) Act, 1985 and when the rehabilitation proceedings were before the BIFR.
(b) Whether, the respondents and the Hon'ble High Court were justified in not following the direction and judgment of the Hon'ble Supreme Court in the case of Gram Panchayat v. Vallabh Glass Works Ltd. [1990 (2) S.C.C. (440)], wherein it was held that the proceedings for execution of recovery of the amount remain suspended in the case of Sick Industrial Unit, under the Sick Industrial Companies (Special Provisions) Act, 1985.
The High Court, in exercise of its extraordinary writ jurisdiction, declined to interfere with the Order passed by C.E.G.A.T."
Hon'ble Madras High Court in the case of Tamil Nadu Chromates Ltd. v. Union of India, reported in 1994 (70) E.L.T. 512 (Mad.) had held as under :-
"The whole idea that one gets from reading of Section 22 of the Act, is that the Parliament was concerned with the salvaging of the productive aspects of the sick company. Therefore, when the goods are manufactured for sale and the final products are removed from the site, it cannot be said the action relates to the liquidation of or even the depreciation of the assets of the sick company. In my opinion therefore, Section 22 of the Act, cannot have the effect of preventing the Central Excise Authorities from demanding and collecting excise duty at the time of the removal of the manufactured goods, I make it clear that I am not concerned with a case of arrears of excise duty accumulated over a period of years. Therefore, the interim order of the Supreme Court of India referred to in the affidavit of the petitioner in Civil Appeal No. 1028 of 1990, would not, in my opinion, apply to the present facts of the case. In this connection the judgment of the Gujarat High Court in relation to the sales tax arrears collected from the purchasers, by the Government seems to be apposite. Section 11D of the Central Excise Act, also is to the same effect."
5. In view of the above discussion, we are of the view that the mere fact that the unit has been declared as a sick unit, the appellants have to comply with the terms of provisions under Section 35F of the Central Excises and Salt Act, 1944. Keeping in view the totality of facts and circumstances of the case, we are of the view that if the appellants are desired to deposit the full duty amount at Rs. 3,62,871/-, it will amount to undue hardship. We dispense with the pre-deposit of the same on the condition of the appellants depositing Rs. 1,25,000/- (Rupees One Lakh Twenty Five Thousand only) within ten weeks from today. The appellants shall report compliance of this order to the Registry within twelve weeks from today. The matter is listed for mention on 11th April, 1995. In case the appellants fail to comply with the terms of this order, the stay order shall stand automatically vacated.