JUDGMENT
Jyoti Balasundaram, Member (J)
1. The above applications for waiver of predeposit and stay of recovery arise out of the order of the Commissioner of Central Excise, who has confirmed the duty demand of Rs.36,16,232/- against M/s. Ashoka Spintex Ltd. and imposed a penalty of Rs.36 lakhs upon this unit, in addition a penalty of Rs.3 lakhs has been imposed on Shri R.M.Gohel, who is the Executive Marketing of the Company and enalties of Rs.1 lakh each have been imposed upon Shri Umesh K. Shah, Deputy General Manager and Shri B.R. Shah, Cost Accountant. The duty demand consist of two elements : [1] demand of Rs.9,76,047/- for the period 24.7.95 to 31.3.96 which has been confirmed on the ground of non inclusion of certain elements such as administrative overhead, bonus, gratuity and interest etc. in the value of yarn captively consumed. [2] Rs.26,40,185/- for the period 1.4.94 to 23.7.95 on the ground that yarn captively consumed has to be valid on the basis of Rule 6(b)(ii) of the Valuation Rules.
2. It is the contention of the Ld. Counsel for the applicants that prior to 24.7.95 M/s. Asoka Mills Ltd. was the legal entities working as job worker and duty was being paid on the yarn cleared by it to M/s. Arvind Mills Ltd. on the basis of cost of raw material conversion cost+profit. It is his contention therefore that yarn manufactured during the period 1.4.94 to 23.7.95 cannot be valid on the basis of Rule 6(b)(ii). Regarding the period subsequent to the merger of M/s. Asoka Spintex Ltd. with M/s. Arvind Mills Ltd, he submits that the demand on the ground of non-inclusion of the elements set out above in the assessable value is barred by limitation. Lastly he submits that on the ground of heavy financial loss in the case of M/s. Arvind Mills Ltd., vide stay order No. C-I/747-49/WZB/2001 dt. 13.7.2001, predeposit of the duty and penalty has been waived on the ground of financial hardship subject to predeposit of Rs. 2 lakhs as admitted by the company.
3. The prayer is opposed by the Ld. DR who contents that no prima facie case for waiver has been made out either on the merits or on the time bar aspect. He submits that since the applicant suppressed the correct assessable value, extended period of limitation is available to the department.
4. We have considered the rival submissions. The merits of the issue as well as the aspect on limitation are dutiable and can only he gone into at the stage of final hearing of the appeals. However regard to the grant of stay on the ground of financial hardship to the same assessee by the stay order cited above, dispense with the predeposit of duty and penalty by the Applicant Company. However the ground of financial hardship is not available to their remaining three applicants who are employees drawing high salaries and we therefore direct predeposit of Rs.5000/- each by the other three applicants(individuals) within a period of four weeks from today. On such deposit predeposit of balance penalty impose on the three individuals shall stand waived and recovery thereof stayed pending the appeals.
5. Failure to comply with this direction shall result in vacation of stay and dismissal of the appeals without prior notice.
6. Compliance to be reported on 25.10.2001.
(Pronounced in Court)