2008 (10) TMI 525

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....deposit, pre-deposit of penalty shall stand waived. The appellant moved the jurisdictional High Court, namely, High Court of Madhya Pradesh in Writ Petition No. 1802/2007. A learned Single Judge of the High Court by order dated 22-3-2007 set aside the order with liberty to the appellant to renew the prayer for waiver. The learned Judge referred to the decisions in Sangfroid Remedies Ltd. v. Union of India, 1998 (103) E.L.T. 5 (S.C.) and Mehsana Dist. Co-op. Milk P.U. Ltd. v. Union of India, 2003 (154) E.L.T. 347 (S.C.). The Revenue challenged the said order of the learned Single Judge before the Division Bench of the High Court in Writ Appeal No. 401/07. The High Court declined to interfere with the order observing that the matter was to be....

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.... there is one other factor in this case and that is the appellant has since been declared as a sick industry by an order dated 23rd April, 1998 by the Board for Industrial and Financial Reconstruction." In Mehsana Dist. Co-op. Milk P.U. Ltd. v. Union of India (supra) which had arisen from the order of the Tribunal under Section 35-F of the Act, the order was set aside observing : "The reasoning given in support of such order is wholly unsatisfactory. The appellate authority has not at all considered the prima facie merits and has concentrated upon the prima facie balance of convenience in the case. The Appellate Authority should have addressed its mind to the prima facie merits of the appellants' case and upon being satisfied of the same ....

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.... Sick Industries Act, provides relief in regard to the proceedings which relate to (a) winding up of the industrial company; (b) execution, distress or the like against any of the properties of the industrial company, (c) the appointment of a receiver in respect thereof, and (d) proceeding in regard to suit for recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company. Payment of pre-deposit covered under Section 35F of the Central Excise Tax Act, 1944 does not fall under any of the above-mentioned categories in Section 22 of the Sick Industries Act." 4. A conjoint reading of the said two decisions will make it clear ....