1985 (2) TMI 254 - AT - Central Excise

Tribunal denies stay of execution & deposit waiver under Section 35F. Financial position not a basis.

BRIMA SUGAR LIMITED Versus COLLECTOR OF CENTRAL EXCISE, PUNE

The Tribunal denied the application for stay of execution and dispensing with the deposit under Section 35F of the Central Excises and Salt Act, 1944. It ... - Issues: Application for stay of execution of order under Appeal and dispensing with deposit under Section 35F of the Central Excises and Salt Act, 1944.Analysis:1. The judgment pertains to an application for stay of execution of an order under Appeal and dispensing with the deposit under Section 35F of the Central Excises and Salt Act, 1944. The Tribunal considered the application as one under Section 35F since there was no other application. The Applicant argued for interim stay based on the Supreme Court rulings and claimed undue hardship in making the deposit due to financial constraints during the crushing season.2. The Applicant contended that making the deposit of duty in the sum of Rs. 30,046.27 would cause undue hardship due to financial difficulties during the crushing season. However, the Tribunal noted that the Applicant's reserves of Rs. 1,29,98,116 indicated that the deposit would not cause undue hardship. The Applicant's reluctance to submit their balance sheet raised doubts about the claimed financial constraints.3. The Tribunal emphasized that the requirement of deposit under Section 35F is crucial for the maintainability of the Appeal. The existence of a prima facie case was deemed less significant in the context of Section 35F, as the deposit is a condition precedent for hearing the Appeal. The Tribunal highlighted that undue hardship consideration includes assessing the liquidity of the assessee, as established in previous Supreme Court judgments.4. The Tribunal rejected the Applicant's argument of gross violation of law and injustice, stating that mere disagreement with an order does not necessarily warrant stay of execution. It was emphasized that exceptional circumstances leading to irreparable injury are necessary for granting a stay, and the mere existence of an Appeal does not automatically justify dispensing with the deposit under Section 35F.5. The Tribunal dismissed the Applicant's plea of requiring funds for current manufacturing activities as undue hardship, stating that pursuing an Appeal necessitates prioritizing deposit requirements. The Tribunal concluded that the Applicant's financial position did not warrant dispensing with the deposit, as their reserves indicated sufficient liquidity to make the deposit without causing undue hardship.6. In the final analysis, the Tribunal found no merit in the application for stay of execution or dispensing with the deposit under Section 35F. The Tribunal emphasized the importance of considering the Applicant's liquidity, as highlighted in previous Supreme Court judgments, and dismissed the application, affirming the requirement of making the deposit as per Section 35F for the Appeal to be maintainable.