2009 (9) TMI 556 - HC - Central Excise

High Court modifies Tribunal's order, allows bond instead of pre-deposit for duty.

HINDUSTAN PETROLEUM CORPORATION LTD. Versus UNION OF INDIA

The High Court of Bombay partly allowed the petition challenging the Customs Excise and Service Tax Appellate Tribunal's order directing the petitioner to ... Stay- Naphtha for fertilizers- two separate show-cause notices demanding very same duty were issued to recipient. Demand has been raised on the ground that much quantity of Naphtha not used for manufacture of fertilizers. Duty liability if end use condition violated. Petitioner clearing Naphtha under Notification No. 6/2002-C.E. to M/s RCF for use in manufacture of fertilizers. SCN to RCF and the appellant for violation of end use. Petitioner submitting that they fulfilling all conditions of notification and duty liability. If any on M/s RCF. Petition against Tribunal order directing about 50% pre-deposit. Held that- not necessary to go into question of chargeability of duty as it would amount to pre-judging issue. Impugned order not considered instructions issued by CBE&C as in Central Excise Manual. Petitioner a Govt. undertaking. Solvency beyond doubt. Question raised needs serious consideration by Tribunal. To meet end of justice petitioner directed to execute general bond in place of pre-deposit. The High Court of Bombay heard a case in 2009 where the petitioner challenged an order from the Customs Excise and Service Tax Appellate Tribunal. The Tribunal had directed the petitioner to pre-deposit a sum of Rs. 3,75,00,000 towards duty within eight weeks. The petitioner had submitted a revised bid for supply of goods and claimed exemption from excise duty based on specific notifications. The Tribunal's order was challenged by the petitioner on the grounds that they had complied with all stipulations and that the duty liability should be on the recipient of the goods, not the sender. The petitioner also argued that as a Central Government undertaking, they were exempt from furnishing security. The respondent, while justifying the order, acknowledged the petitioner's status as a Central Government undertaking. The High Court noted that the petitioner's solvency was not in doubt and that the instructions from the Board should have been considered by the Tribunal. The Court modified the order, directing the petitioner to execute a general bond instead of pre-depositing the amount. The petitioner was given four weeks to execute the bond. The petition was partly allowed with no order as to costs.