TaxTMI 
TaxTMI 
2009 (3) TMI 534
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....iabad. 2. Few facts relevant for the decision in the matter are that the appellant sought to challenge the original order dated 31-3-2008 passed by the Additional Commissioner, Central Excise, Ghaziabad in the matter whereby the Additional Commissioner had confirmed the demand for Rs. 22,06,738/- under Section 11A(1) of the Central Excise Act, 1944 against the appellant and also confirmed the demand for interest on the said amount at the applicable rates under the provisions of Section 11AB of the said Act and further imposed penalty of Rs. 22,06,738/- in exercise of power under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the said Act. The said order was sought to be challenged on the various grounds includi....
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....earned Advocate also drew our attention to the decision of the Apex Court in the matter of Nizam Sugar Factory v. Collector of Central Excise, A.P. reported in 2008 (9) S.T.R. 314 (S.C.) = 2006 (197) E.L.T. 465 (S.C.). 4. Learned DR on the other hand, placing reliance in the decision of the Apex Court in Benara Valves Ltd. v. Commissioner of Central Excise reported in 2008 (12) S.T.R. 104 (S.C.) = 2006 (204) E.L.T. 513 (S.C.) submitted that the mandate of Section 35F of the said Act clearly requires the appellant to satisfy that the direction to deposit the duty demanded or penalty levied would cause undue hardship and failure in that regard would not entitle the appellant to claim any benefit on the ground that the amount was depo....
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.... (supra) had clearly held that Section 35F of the said Act speaks of "undue hardship" and "safeguard the interest of revenue" and, "therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view". Further, reiterating the view taken by the Apex Court in S. Vasudeva v. State of Karnataka and Ors. (AIR 1994 SC 923) it was held that the expression "Undue hardship" is normally related to economic hardship and "Undue" means something is not merited by the conduct of the claimant, or is very much disproportionate to it. It has been further observed that undue hardship can be said to have been cau....
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....n detail that itself cannot be a justification to ignore the mandate of provision of law comprised under Section 35F of the Act. 8. The Apex Court in Benara Valves Ltd. case has clearly ruled that "it is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order h....
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....d to this aspect, and therefore the appellants are justified in contending that the impugned order is bad in law. The matter, therefore, needs to be remanded to the lower appellate authority to deal with the same in accordance with the provisions of law as early as possible within a specified time limit. It is also necessary to bear in mind that the Apex Court ruling in Benara Valves Ltd. where Apex Court has held that the order of stay or exemption from the payment should not be passed without considering the aspect regarding "safeguard the interest of revenue". Both the aspect regarding hardship to the party as well as safeguard of the interest of revenue are to be considered while passing such order. However, in the peculiar facts and ci....