ORDER
Moheb Ali M., Member (T)
1. These applications for waiver of pre-deposit of duty and penalties arose out of the order of the Commissioner of Central Excise, Aurangabad.
2. M/s. Shivshankar Plywood Industries Pvt. Ltd., the applicant, manufactures plywood, veneer and resin. The Commissioner’s finding are that the applicant has undervalued and also clandestinely removed the above excisable goods. The modus adopted by the applicant, according to the Commissioner, is to remove excisable goods sometimes by undervaluing them and on other occasions clandestinely without payment of duty and to show the sale proceeds thereof as receipts for sale of timber. In fact, according to the Commissioner, there was no sale of timber as during the course of investigation it was found that most of the firms/persons to whom timber is shown to have been sold are either nonexistent or have such premises where they could not have handled any timber. On the basis of various statements of employees, both former and current, balance sheet and some chits recovered, the Commissioner came to the conclusion that the applicant evaded duty and therefore was liable to penal action along with other applicants who aided and abetted him in the commission of various offences.
3. The learned advocate for the applicants assailed the order on several grounds. The more important of them are that the Commissioner relied upon certain statements made by various persons but did not allow cross-examination of these persons on the plea that the CESTAT while remanding the order to the Commissioner only directed the department to make all relied upon documents available to the applicant but have not directed the Commissioner to allow cross-examination. The learned advocate relied upon the decision of the Bombay High Court in (2000 [123] ELT [Bom]) who held that refusal to afford opportunity to petitioners to cross-examine vitiates the proceedings. He farther contended that the Department had hardly established that there was undervaluation of excisable goods produced by his client. He relied upon the decision in Sharon Veneers v. CCE, Chennai 2002 (146) ELT 655 wherein the Tribunal held that Revenue has to establish extra payment as well as its receipt with credible evidence, though not with mathematical precision, to establish the charge of undervaluation. The department failed to do so. He argued on the grounds stated in stay application and contended that the applicants have a strong prima facie case in their favour.
4. The learned advocate filed the audited balance sheet of the applicant for the year ended 31.3.2003 which indicated that the applicant suffered huge losses (Rs. 1,04,07,272/-) and the accumulated loss as on 31.3.2003 was of Rs. 2,66,41,399/-. He therefore pleaded that pre-deposit be waived and recovery stayed in the interest of justice.
5. The learned Jt. CDR who appeared for the department strongly contended that the Commissioner had given reasons as to why he did not consider it necessary to allow cross-examination of various persons; that the case of the department rested on the evidence gathered during the course of investigation; that the department was successful in establishing that there was no sale of timber; that the lorry receipts recovered indicated that plywood was sold away without payment of duty; that the fact that the firm to whom timber is claimed to have been sold are non-existent and that the department has a strong prima facie case in their favour and that the applicants should be directed to deposit the entire amount of duty and penalties.
6. Heard both sides.
7. We have considered the case law filed and the arguments advanced. We observe that the applicants have not made out a strong prima facie case in their favour so as to order complete waiver of duty. The Revenue’s case is based on several documents such as balance sheet of the company, chits recovered, lorry receipts recovered, non-existence of some of the firms to whom timber seemed to have been sold, statements of ex and present employees etc. etc. Having regard to the financial condition of the applicants and other contentions raised before us, we direct M/s. Shivshankar Plywood Ind. Pvt. Ltd. to deposit Rs. 60,00,000/- (Rupees sixty lakhs) towards duty within 12 weeks of the date of this order. Upon such deposit, further deposit of duty and penalties is waived and recovery thereof stayed. Pre-deposit of penalties imposed on the other applicants waived. The appeal is liable to be rejected without further notice if the applicant does not comply with this direction.
8. Compliance on 5.7.2004.