Customs, Excise and Gold Tribunal - Delhi
M/S. Modipon Fibre Co., Sh. S.C. Gupta ... vs Cce, Meerut on 10 May, 2001
Equivalent citations: 2001(76)ECC95
ORDER
C.N.B. Nair
1. The dispute is about valuation of yarn sold by the appellant from their Depots. A duty demand of about Rs. 47 Lakhs has been confirmed for the period 1994-97 holding that the deduction claimed by the appellant on account of Turn Over Tax was too high and that part of the goods had been sold to purchasers who were eligible for Turn Over Tax at exempted lower rates. A penalty of an equal amount also has been imposed under Section 11 AC of the Central Excise Act. Through this Stay Application the appellants seek waiver of pre-deposit of the duty demand and penalty. Learned Counsel representing the appellants has submitted that the duty demand is not legally correct, inasmuch as, the appellants had sought deduction only to the extent of Turn Over Tax payable on the goods sold form their Depots located at Gujarat. Since considerable time lag takes place between clearance of the goods from the Factory and their sale form the depots, appellant could not be expected to anticipate which parties would purchase the goods and what would be the effective rate of Turn Over Tax on the sale to those parties. He, therefore, submitted that the appellant had correctly sought deduction at the rate at which Turn Over Tax was generally payable in the State. He also submitted that there is no justification for raising demand invoking the Provision for extended period. With regard to penalty, the learned Counsel submitted that the Provisions of Section 11AC could not be invoked in this case at all, since bulk of the duty demand related to period prior to bringing into force of Provisions of Section 11 AC (September 1996). the learned Counsel submitted that on the ground of undue hardship also waiver as sought is required to be granted. He pointed out that the appellants had a carried over loss of about Rs. 50 Crores as on 31st December 2000. In this contest he drew our attention to profit and loss statement filed alongwith Stay application.
2. We have heard the learned DR. He opposed granting of waiver on the ground that the appellant was aware that sales in Gujarat were to exempted parties also. Therefore, the appellant had no difficulty in filing declarations indicating the effective rate of Turn Over Tax.
3. The deduction claimed by the appellant was equal to the Turn Over Tax normally payable on the sale of goods in Gujarat. There is force in the appellants submission that, at the time of removal of the goods from the factory, they could not have anticipated as to who would be the parties, who would purchase the yarn from the Depots and what would be the effective rate of Turn Over Tax on sale to such parties. Therefore, there is prima-facie considerable force in the appellants' submission that suppression of facts with intent to evade payment of duty could not be alleged against them. We also observe from the statement of profit and loss filed by the appellants that they are having huge carried over losses. The losses also doubled during the last year. It also constitutes a large percentage of gross annual sale income of about Rs. 155 Crores. In these circumstances, on the ground of strong prima-facie case as well s undue financial hardship, we consider this to be a case meriting waiver of pre-deposit of both duty and penalty. The stay application is ordered accordingly. The Revenue shall not take any action for the recovery of the duty and penalty amount during the pendency of the appeal.
4. In view of our order in the main stay application filed by assessee, the stay sought by the two officers of the company in appeal No. 604/2001-A is also allowed. All appeals to come up for hearing on 3.7.2001.
(Pronounced & dictated in the open Court)