1999 (3) TMI 84 - HC - Central Excise

High Court Upholds Order on Excise Duty Pre-deposit & Stay despite Natural Justice Challenge

BPL SANYO UTILITIES AND APPLIANCES LIMITED Versus UNION OF INDIA

The High Court upheld the order passed under Section 35F regarding waiver of pre-deposit and stay of recovery of excise duty, despite the petitioner's ... Stay/Dispensation of pre-deposit - Criteria Issues involved: The issues involved in the judgment are the challenge to the order passed under Section 35F regarding waiver of pre-deposit and stay of recovery of excise duty, violation of principles of natural justice, financial difficulties faced by the petitioner, and the discretion exercised in granting waiver of pre-deposit.Violation of Principles of Natural Justice: The petitioner challenged the order passed by the Assistant Commissioner of Central Excise, alleging a violation of natural justice principles as the documents were not confronted to them. The High Court directed the petitioner to file an appeal, emphasizing that the appellate authority can entertain appeals even if natural justice principles were violated. The Court found that a prima facie case in favor of the Assistant Commissioner was supported by documentary evidence, and financial difficulties were considered in directing the petitioner to deposit a sum of Rs. 4,50,00,000 out of the total demand within 90 days.Legal Precedents and Observations: The petitioner relied on legal precedents such as the case of State of U.P. v. Mohammad Nooh and New Wood Pvt. Ltd. v. Superintendent of Central Excise to argue that orders passed in violation of natural justice are nullities. The Court referred to judgments like Sangfroid Remedies Ltd. v. Union of India and Sri Krishna v. Union of India to highlight the importance of serving notices and providing opportunities to parties. The respondent cited the finding of the adjudicating authority regarding internal documents and mutuality of interest.Judicial Discretion and Balance of Convenience: The Court considered the exercise of judicial discretion in granting waiver of pre-deposit, referring to cases like State Bank of Patiala v. S.K. Sharma and AUMA (India) Ltd. v. Union of India. The judgment emphasized the need to balance convenience, irreparable injury, and public interest while deciding on waiver of pre-deposit. The Court directed the petitioner to deposit 40% of the demand within the specified period, taking into account the financial stringency raised by the petitioner.Conclusion: In conclusion, the High Court disposed of the writ petition with the observation that the order regarding waiver of pre-deposit and stay was a discretionary one, which must be exercised judiciously. The Court directed the petitioner to deposit a specified amount within the given timeframe, considering the facts and circumstances of the case.