Dismissal of petition challenging CESTAT's order on pre-deposit; compliance with Section 35F emphasized.

The Court dismissed the petition challenging the CESTAT's order directing a pre-deposit of Rs. 65.00 Lakhs, emphasizing compliance with Section 35F of the Central Excise Act. The Court found no interference warranted and offered an eight-week extension for compliance. However, the petitioner did not avail of this offer, resulting in the dismissal of the petition with no order as to costs.

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Issues Involved:
1. Challenge to the order of CESTAT directing pre-deposit.
2. Financial hardship of the petitioner.
3. Calculation errors in the duty demand.
4. Non-supply of seized documents.

Issue-wise Detailed Analysis:

1. Challenge to the Order of CESTAT Directing Pre-deposit:
The petitioner challenged the CESTAT order dated 28th February 2011, which directed the petitioner-firm to pre-deposit Rs. 65.00 Lakhs, being 50% of the duty amount, within 12 weeks. The Tribunal had directed the petitioner to deposit 50% of the duty amount, taking into account that Rs. 14.50 Lakhs had already been deposited during the investigation. The Tribunal stayed the recovery of the total amount of duty, interest, and penalty during the appeal's pendency, subject to the compliance of the pre-deposit direction.

2. Financial Hardship of the Petitioner:
The petitioner argued acute financial hardship and claimed that the Tribunal disregarded this aspect. However, the Tribunal noted that no prima facie case or financial hardship was pleaded or substantiated with records. The petitioner's financial documents indicated a gross profit of Rs. 55,67,096/- for the year 2009-10 and Rs. 45,60,805/- for the preceding year, showing financial strength rather than hardship. The Tribunal observed that clandestine activities are not reflected in statutory records, thus questioning the reliability of the balance sheet.

3. Calculation Errors in the Duty Demand:
The petitioner contended that the Commissioner of Central Excise made calculation errors, resulting in inflated duty demands. The Court noted that this issue would be examined in the appeal and that the pre-deposit order was only 20% of the total confirmed amount of Rs. 3.50 Crores. The Court emphasized that the Tribunal would address the merits of these calculations during the appeal process.

4. Non-supply of Seized Documents:
The petitioner claimed that the department did not furnish copies of seized documents, hindering their defense. The Court acknowledged this issue but stated it did not significantly impact the pre-deposit requirement. The Tribunal was expected to provide the necessary documents to the petitioner for substantiating their case on merits during the appeal.

Conclusion:
The Court dismissed the petition, finding no interference warranted in the Tribunal's decision requiring the pre-deposit of Rs. 65.00 Lakhs. The Court emphasized compliance with Section 35F of the Central Excise Act, which considers undue hardship and safeguarding revenue interests. The Court offered an extension of eight weeks for the petitioner to comply with the pre-deposit order, allowing the appeals to be heard on merits by the Tribunal. However, the petitioner did not avail of this offer, leading to the dismissal of the petition with no order as to costs.

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