Posting it again for your suggestions. what is the next step after the appeal dismissed by the Central excise Tribunal?
K.Ravichandren
(Querist) 10 August 2008
This query is : Resolved
In an appeal the Central excise Tribunal dismissed the appeal on the basis of no compliance of its interim order(stay order and to deposit Rs.8,00,000) within the stipulated time. Now what is the next step i should adopt?
For your nutshell the case is:-
Being a job worker i undertake orders from a company. I undertake only a small works of the total finished product. I am clearing assemblies upon payment of excise duty including value of the inputs put by me and in my cost. The company concerned sends me some free inputs for the assembly and i am neither accounting nor taking credit on that and the value of such free inputs or not included on the service charges. The excise authorities sent show cause notice to me mentioning that during the past two years i havenot included the free inputs and demanded excise duty of Rs.15,00,000/- and the penalty of Rs.15,50,000/- under sec 11A(2)CEA, read with Rule 6 of Central Excise Valuation Rules 2000 and for penalties sec 11AB, Sec. 11AC ibid under rule 25 od CE rules 2002. Agreived against i preferred appeal to the Commissinerand they reduced the Penalty to 8,00,000/- and confirmed the rest of the order. Again I preferred appeal in the Tribunal and obtained stay for the operation of the lower order with a direction of depositing Rs.8,00,000/- with in a short period of time and since i could not mobilise i sought further time and even after that time i could not deposit the money and hence my appeal is dismissed. I am financially in a bad position and my other properties are in the bank for loans and the factory concerned also could not run for the past one year. I even though of filing insolvency petition.
This is my position now. Kindly advise me whether i can appeal to another forum - High Court?. Is it possible can i give insolvency for this Central Excise propblem while my properties are in the banks and case is pending in DRT and the bank has right for the first charge over the properties.? Your valuable advice sought
Rajesh Kumar
(Expert) 15 August 2008
You have a strong case. But it appears that strength of your case is not being pleaded, otherwise there should not be any order of pre deposit.
Presently, the best course is to approach the tribunal again with offer to pre deposit the amount as asked. If this is not possible, then approach the High Court under Writ Jurisdiction, stating your financial position. High Court may entertain your petition and reduce the pre deposit.
K.Ravichandren
(Querist) 19 August 2008
Thanks Mr.Rajesh. But i still in need of clearance whether the Central Excise can over rule the Bank to attach and auction my properties to recover the dues or can they have another charge over my properties? Can the Central excise authorities can take penalisting and on the basis of prosecution i could suffer imprisonment for not making their payment?
Please clarify these points also.
Rajesh Kumar
(Expert) 06 September 2008
Once order of predeposit has been made, you are required to pre deposit the amount. Otherwise your appeal will be dismissed.
Once your appeal is dismissed, the order becomes final and you are required to pay the money.
Thus, as there is no stay against the order u have filed appeal against, the department can recover the amount from the company (i suppose ur business concern is a company). If the properties are mortgaed to bank, then also the department can initiate the proceeding, and if the company becomes sick, or approaches BIFR, the forum will decide as to which person get what.
If it is a company, then there is no liability of the director or shareholder, except if any personal penalty has been imposed.
However, if the business concern is a proprietorship or partnership, the owner or partner is fully liable, and even the personal property can be attached.
Rajesh Kumar
(Expert) 06 September 2008
Regarding prosecution, if the department file prosecution under Section 9 of the Central Excise Act, the court may order imprisonment.
Imprisonment cannot be done for not paying civil dues, if you are not in a position to pay- as the section of Civil Procedure Code has been declared void by the Supreme Court. However, if you are in a position to pay, you may be sent for civil imprisonment for not paying government dues.
