STEEL FABRICATORS Vs. COLLECTOR OF CENTRAL EXCISE AND CUSTOMS

JUDGEMENT

(1.) FOR hearing the applicant's aforesaid four appeals they are required to deposit a total amount of Rs. 10,28,849.23 demanded by the Collector of Customs & Central Excise, Baroda. All the aforesaid demands have arisen out of the common issue. Hence Shri Koruthu argued on the merits of the stay applications in common. Firstly, he pleaded extreme financial hardship and it is impossible for the applicants to make the deposit He took us through the assessment orders of the applicants' firm, balance sheets, individual partner's income to show that the firm has incurred a loss of Rs. 17,688 during the year 1988-89 and the partner's income including agriculture income was only of the order of Rs. 1.29 lakhs during the year 1987. They have sundry creditors to the extent of Rs. 5.95 lakhs. They have sundry debtors to the extent of Rs. 8.85 lakhs, and as of Rs. three lakhs may have to be written off as bad debt. Shri Koruthu also contended that the aforesaid demands are prima facie time barred. They have been confirmed by invoking the extended period under Section 11A of the Central Excises & Salt Act. The demands have arisen out of an audit objection of the Accountant General audit party. They have been manufacturing industrial fans as well as dust extraction units since 1973. Prior to 1975 when there was no duty on T.I. 68, they had been removing only of the industrial fans on payments After the introduction of T.I. 68 in 1975 Budget, they have filed classification list separately for industrial fans and for dust extraction unit without industrial fans under T.I. 68. These classification lists have been approved from time to time without any objection till 1985. Even the Internal Audit party and Accountant General audit parties who have early visited their factory have not raised any objection. Only in 1985, an objection was raised to the effect that the dust extraction unit should include the custom duty value of the industrial fans also and when this is so included, the applicants would not be eligible for small scale exemption. On that ground demands have been confirmed alleging suppression of facts. He took us through the classification filed for dust extraction units, which clearly indicates as below

(2.) Heard Shri Arya. On the financial position, he pointed out that the applicants have some resources to the extent of Rs. One lakh and odd He however, stated that their financial position is not sound. On the question of time bar, he pleaded that there is a mis-classification of dust extraction unit without including the value of the industrial fans. Hence, the extended time limit is justified.