ORDER
S. Kalyanam, Vice-President
1. This is an application for waiver of pre-deposit of duty of Rs. 26,93,912 and a penalty of Rs. 4.00 lakhs levied on the petitioners under the impugned order of the Collector of Central Excise, Madras, dated 21.9.1992.
2. Shri Govindaswamy, the learned Consultant submitted that duty has been demanded on the ground that the petitioner has manufactured excisable product, namely shampoo in the brand name ‘Cute’ not only in the petitioner’s factory but also through some other factories fictitiously created for wrongly availing the benefit of small scale exemption notification and assailed the correctness of the findings in the order. The learned Consultant also pleaded acute financial hardship and said that even on an earlier occasion when the petition for restoration was taken up a detailed affidavit was filed in this regard and adopted the same pleas for this petition also and further submitted that the financial position is only becoming worse day by day.
3. Shri Jeyaseelan, the learned DR contended that the impugned order is sustainable on merits and urged that as stated by the petitioner in the affidavit in the earlier proceedings, they have a landed building at Porur valued at Rs. 12 lakhs which has been mortgaged to the Indian Bank and the Department has no further instructions about any property belonging to the petitioners. The learned DR submitted that the Department should have the liberty to proceed against the property of the petitioner or other assets if any in the event of the same being available for recovery.
4. Shri Govindaswamy has no objection to this plea of the learned DR.
5. We have considered the submissions made before us. Prima facie we do not find any infirmity in the reasoning in the impugned order and Shri Govindaswamy, the learned Consultant also read through the relevant portion of the order where the petitioners plea against clubbing has not been accepted on the basis of evidence referred to in the order.
6. So far as the plea of financial hardship is concerned, in our order nc 196/94 dated 22.7.1994 the contention of the petitioner has been set out as under:
Shri Govindaswamy, the learned Consultant for the petitioners submitted that the stay petitions were filed by the petitioners seeking stay of pre-deposit of duty and penalty and the same came up for hearing on 23.6.1993. Consequent on the absence of the petitioner the stay petition was dismissed for default of appearance as not pursued and the petitioners were directed to make the pre-deposit in terms of the impugned order on or before 31.8.1993 and report compliance. 31.8.] 993 was declared a holiday due to Milad-un-Nabi. The petitioners filed applications for restoration of the stay petitions on 14.7.1993 stating that the notice of hearing of the stay petition posted to 23.6.1993 was not received by the petitioners and the stay petitions were restored to file on 30.8.1993 and posted to 24.10.1993. Since 24.10.1993 was Sunday the petitioners contacted the Registry on 25.10.1993 and were informed by the Registry that their files had been misplaced and they would be informed about the next date of hearing. The petitions were posted to 3.1.1994, but no notice of hearing was received by the petitioners. The petitioners were dismissed again on 3.1.1994 for which the present restoration applications were filed on 1.2.1994. It was submitted that the records of the Registry would show that there was no laches on the part of the petitioners. It was further submitted that the petitioners do not own any property, except the building in which the factory is housed, which is also heavily mortgaged to the Indian Bank. The factory also remains closed since 1.9.1991. These facts are sworn to by an affidavit. Petitioner Ranganathan has filed an affidavit to the effect that he does not own any property and owes Rs. 5,14,699.37 to the Indian Bank as on 31.3.1993 as proprietor of M/s. Crystal Corporation and has personal liability and market dues to the tune of Rs. 8 lakhs. It was further urged that the petitioners are thriving on a meagre rental income and has no means to pre-deposit the amount. It was further urged that the petitioners have no objection to the Department recovering the entire amount due in terms of the impugned order if the Department is able to find any property belonging to the petitioners.
And, in considering the above plea, the Tribunal has also observed as under:
The petitioners’ affidavits in regard to which notices were given to the Department would show that the petitioners do not have any asset and even the factory at Porur, the only property building is also mortgaged to the Indian Bank, the details of which sworn to, in an affidavit are as under:
Balance of loan outstanding as on 31.3.1993
Ind--Chems 2,24,606.60
7,42,721.20
2,26,296.02
____________
12,13,629.82
12,13,629.82
5,14,699.37
3,15,829.54
____________
Crystal Corporation as guarantor 20,44,158.73
Rs. 5,14,699.37
Steller Industries as guarantor
1,75,672.75
1,40,156.79
___________
3,15,829.54
Market value of the land and building at present would be around Rs. 12,00,000. The house in which I am residing now belongs to my father Mr. P.C. Singarachari which was bought and built by him out of his own earning during 1963.1 do not pay any rent.
As on date either myself or my wife Mrs. Chandra Ranganathan or my two sons do not have any movable or immovable properties in their respective names apart from the factory building referred above.
It is not the case of the Department that what is stated in the affidavit is not correct. The petitioners have also no objection to the Department proceeding against the asset of the petitioners, if any available to recover the dues in terms of the impugned order. In other words, the petitioners do not even seek a stay of the recovery of the amount under the impugned order and want only to exercise their right of appeal and for that reason would seek restoration of the stay petition to argue the same on merits and to plea for waiver of pre-deposit of duty and penalty pending appeal in the above facts and circumstances on grounds of undue hardship, financial crisis, total penury, etc.
7. We, therefore, while granting waiver of duty and penalty pending appeal, make it clear that we are not granting any stay of recovery, of the amount in question and further hold that it is open to the Department to proceed to recover the duty from out of the assets if any found with the petitioners than what is stated in the affidavit Ordered accordingly.