Customs, Excise and Gold Tribunal - Delhi
Rastogi Brothers vs Commissioner Of Central Excise on 4 October, 2006
Equivalent citations: [2007]6STT272
ORDER
R.K. Abichandani, J. (President)
1. We have heard the authorized representative of applicant at length on modification of the stay order, by which the applicant was required to make a pre-deposit of Rs. 12 lakhs within 8 weeks, failing which, the appeal was to stand dismissed.
2. It is contended on behalf of the applicant that the limitation and financial hardship aspects have not been considered in the said order. It appears that these aspects were not orally argued. However, since the contentions were taken in the application, we have heard the learned Authorised Representative for the applicant. On the question of limitation, it is contended that the facts were already in the knowledge of the department and therefore, extended period of five years was not available. He places reliance on the decision of Supreme Court in Nizam Sugar Factory v. CCE, A.P. reported in 2006 (197) E.L.T. 465 (S.C.) in support of this contention. It was, further, argued that the financial condition of the applicant was weak because the firm, which has four partners, had suffered a loss of more than 3 lakhs during the year ending 31-3-2005.
3. The authorities below have, on the basis of material on record, concluded that the applicant had never shown the figures of freight, handling charges and warehousing charges in the ST-3 returns for the period covered by show cause notice, which was from April, 2000 to June, 2004. The show cause notice was issued on 1-11-2004. It was held that the required information with regard to freight, handling charges and warehousing charges was supplied by the applicant only after they were asked to do the same by the Superintended (see paragraph 6.2 of the order in original). The Commissioner (Appeals) held that the appellant had deliberately made a separate agreement to evade payment of service tax on gross C & F agent services, which was suppressed from the department. In view of these findings, it would, prima facie, appear that the extended period was rightly invoked and the decision of the Supreme Court in Nizam Sugar Factory (supra) cannot assist the applicant at this stage, particularly, because it was found in that case that all the relevant facts were in the knowledge of the authorities when the first show cause notice was issued. In the present case, non-supply of vital information to the authorities was not to the knowledge of authorities when the show cause notice for a different period was earlier issued.
4. As regards the contention that the applicant firm was incurring losses, it is noticed from the balance sheet as on 31-3-05 that there are Rs. 17,47,354.38 shown in partners' capital account. Though this amount shown as liability of the firm towards the partners, since all the partners are jointly and individually liable for the dues, they can pay from these deposits because each partner is liable to make the pre-deposit jointly and severally.
5. Furthermore, the balance sheet discloses that firm has fixed assets of Rs. 3,85,423.07 and current assets of Rs. 44,70,908.92, besides the loans and advances of Rs. 2,81,292/-, besides income tax refundable to the tune of Rs. 1,58,447/-. From the profit and loss account, it appears that the provision of Rs. 4,50,000/- has already been made for the income tax. An amount of Rs. 2,58,709.94 is shown as interest to partners on capital account. The particulars of individual partners' assets, both movable and immovable, are not put forward. On overall consideration of the matter, we find that there is absolutely no substance in the contention that the applicant would undergo any financial crisis by depositing the amount of Rs. 12 lakhs.
6. The applicant-assessee was required to pay Rs. 49,04,116/- by way of Service tax and penalty of like amount was also imposed. Therefore, the pre-deposit of Rs. 12 lakhs, as ordered, comes hardly to 12% of the amount payable by the applicant under the impugned order. We do not find any justification whatsoever for modification of the stay order on any of the grounds urged before us.
7. The learned authorised Representative for the applicant seeks time to make the pre-deposit. We grant four weeks time to the applicant from today to make the pre-deposit as ordered, failing which the appeal will stand dismissed The present application is disposed of accordingly.
Post the matter for compliance on 7-11-06.
(Pronounced and Dictated in the Court)