JUDGMENT
Gowri Shankar, Member (Technical)
1. On 23rd August, the bench after hearing both parties on the stay application, recorded inter alia as follows
“The counsel for the applicant tells us that by merging the two together, by addition of the margin of profit (the other issues not being disputed), the duty payable would come down to Rs. 44.56 crores. The applicant has deposited Rs. 15.00 crores. He offers to deposit as an indicator of goodwill another Rs. 15.00 crores within four weeks from to day. We find this offer reasonable and accept it.”
2. The application which we have heard today is for modification of that order. It is first contended that there is “severe financial liquidity crunch at this stage”. The bank limits have been exceeded. There is also recession in demand, both in the domestic as well in the international market. Foreign buyers have asked to delay shipment of goods ordered by them.
3. The profit made by the company in the proceeding financial year ending 30th June 2001 is Rs. 120 crores of which Rs. 28 crores was distributed as dividend. This was for the financial year 30th June 2001. We are told that the company expects a profit for the first quarter of the next year ending 30th September of Rs. 13 crores approx. There are some other grounds which we have considered earlier such as payment of amount of Silvassa unit.
4. We do not think that the ground now urged constitute sufficient material on the base on which it could be said that there has been a significant erosion in the financial standing of the company that reduction in or waiver of the amount we have asked for could be justified. This is, of course, in addition to the fact that every one of these factors (except possibly what is not claimed to be recession on account of terrorist attack in the U.S.) would have been known to the applicant and therefore its counsel when the matter was argued on 30th August. It can be said with reason that every entrepreneur would have knowledge of its financial status in the near feature activity. It is therefore difficult to believe that when the counsel for the applicant through the counsel made his offer was unaware of the facts that bank limits would be stretched in next couple of months.
5. It is also contended that the applicant has filed refund and drawback claims duty with the department amounting totally Rs. 43 crores. Out of this amount, it is stated that drawback claims of Rs. 11 crores are pending from May 2001; claims for the remaining amounts have been filed more recently, and a claim for Rs. 18 crores has been filed on 26th September. The mere fact that the claim has been filed cannot by itself indicate that the amounts are due to the applicant. We do not find any inordinate delay by the department in dealing with the claim. The presence of these claims does not justify reduction in the amount to be deposited. We however clarify that if within the time that we have provided for deposit, any of these claims become payable to the applicant they may be adjusted against the amount payable by it.
6. Except for this modification, we find no ground to reduce the amount but give the applicant a period of six weeks from today to deposit the amount and to report compliance on 29.11.2001.
7. The final hearing of the matter is adjourned. A date will be fixed after compliance is reported.