Court quashes waiver order due to procedural errors, directs Tribunal to reconsider.

The Court quashed the order for waiver of pre-deposit of duty and penalty in an appeal due to procedural impropriety. The Tribunal failed to consider the petitioner's prima facie case and financial hardship as a 'sick unit.' The Court noted deviations from legal principles and directed the Tribunal to reconsider the matter in accordance with relevant provisions. Enforcement of the previous order was restrained until a new application was decided, with no cost order issued.

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Issues involved:
Challenge to order for waiver of pre-deposit of duty and penalty in an appeal.

Analysis:
The writ application challenged an order regarding the waiver of pre-deposit of duty and penalty in Appeal No. EV-335/2001. The petitioner received a show-cause notice in 1999 for central excise duty payment from 1994 to 1997. The Tribunal directed the petitioner to deposit Rs. 25 lacs. The petitioner argued that the Tribunal failed to consider the prima facie case and the company's hardship. They contended that the show-cause notice was issued beyond the 6-month limit and deviated from established legal principles. The financial hardship of the petitioner, declared a 'sick unit' by BIFR, was also highlighted with substantial losses. The Court noted the failure of the Tribunal to consider relevant provisions and aspects, leading to procedural impropriety.

The Court observed that the Tribunal did not adhere to the proviso to Section 35F of the Central Excise Act, 1944, while passing the impugned order. Due to procedural impropriety, the Court quashed the order and directed the Tribunal to pass a reasoned order considering the observations made. The respondents were restrained from enforcing the previous order until the new application was disposed of. The Court disposed of the application without any cost order. A certified copy of the order was to be provided to the parties upon request, subject to necessary formalities.

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