TaxTMI 
TaxTMI 
2011 (7) TMI 385
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....tarted a new company in the year, 1998, with the sewing machines given to him by K.Gunasekhar for the arrears of salary due to him. While so, K.Gunasekhar had asked the petitioner to open a bank account in the Central Bank of India and the Union Bank of India. K.Gunasekhar had asked Govardhanan to sign and hand over some blank cheques from the account of M/s.Maapillai Vinayagar exports, along with some blank letter heads. K.Gunasekhar did not know the details of the exports made in the name of M/s.Maapillai Vinayagar Exports. Govardhanan did not involve himself in any export business, nor had he filed any shipping bills, as alleged. The signatures affixed in the shipping bills and the dockets were not that of Govardhanan. He was not aware of the amount of draw back availed in the name of the petitioner company and he did not know about the export sale proceeds. It had been further stated that the second respondent Department had alleged that M/s.Maapillai Vinayagar exports had exported goods, vide 52 shipping bills and had availed the duty draw back amount of Rs.96,36,837/-. He had also stated that he did not know anything about the import export code. 3. It had been furt....
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....te of the request for adjournment made by Govardhanan, a common order had been passed by the first respondent Tribunal, on 14.2.2011, directing pre-deposit of 50% of the duty draw back and 25% of the penalty. Challenging the said order the petitioner has preferred the present writ petition before this Court, under Article 226 of the Constitution of India. 6. Even though a number grounds had been raised on behalf of the petitioner for waiver of pre-deposit of penalty, pending disposal of the appeal, the first respondent Tribunal had not considered the grounds raised by the petitioner before passing the impugned order, dated 14.2.2011. 7. The petitioner had shown before the first respondent that it had a prima facie case in its favour, as it was not involved in the activities of K.Gunasekaran, who is said to have committed various irregularities. Further, the petitioner has shown that its role was limited to the filing of the shipping bills, as per the instructions and the documents forwarded to it by K.Gunasekaran. There was no knowledge of the irregularities committed by K.Gunasekaran and therefore, penal provisions cannot be invoked against the petitioner. Furt....
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....9. Even though the aforesaid submissions with regard to the financial capacity of the appellants have been recorded by the respondent Tribunal, the Respondent Tribunal has cursorily recorded a finding that the contention of the appellants that they were not in a position to pay cannot be accepted. The Respondent Tribunal has further proceeded on the basis penalty of Rs.5,000/- (sic) is not excessive. The aforesaid findings are not supported by an reasons. The impugned order is thus in flagrant violation of the principles of natural justice, and liable to be set aside and quashed." 9.2. In Adinath Dyeing and Finishing Mills vs. Commr. of C.EX., Ludhiana [(2008 (10) S.T.R. 97 (P and H)], it had been held as follows: "In these petitions we are not concerned with the merits of the controversy raised in the appeals. The short question is whether the Tribunal has exercised the discretion vested in it under the afore-mentioned proviso on sound legal principles considering all the relevant facts. True that at the time of considering of application seeking waiving/stay, it is not desirable for the Tribunal to embark upon a detailed inquiry to find out whether the stand o....
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....s raised on behalf of the petitioner. The application filed on behalf of the petitioner, for the waiver of pre-deposit of penalty, is bereft of facts and particulars. 11. In such circumstances, it is not open to the petitioner to allege that the first respondent had not considered the contentions raised on behalf of the petitioner and that the impugned order had been passed by the first respondent, without giving sufficient reasons. No documents had been filed on behalf of the petitioner to show the existence of 'financial hardship'. The waiver of pre-deposit of penalty is not automatic. Unless the petitioner shows that the conditions enshrined in Section 129 E of the Customs Act, 1962, are made out, by sufficient evidence, the waiver of pre-deposit of penalty cannot be granted, totally, as prayed for by the petitioner. Further, there is nothing to show that the request made by the counsel for the petitioner for the adjournment of the hearing of the application had been placed before the first respondent. Therefore, the first respondent had no occasion to consider the said request. As such, the writ petition filed by the petitioner is devoid of merits. 12. The l....
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...., grave irreparable private injury or shake a citizens' faith in the impartiality of public administration, interim relief can be given. Two significant expressions used in Section 35-F of the Central Excise Act, 1944, are "undue hardship to such person" and "safeguard the interests of revenue". Therefore, while dealing with the application twin requirements of considerations have to be kept in view The aspect of undue hardship is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. Under Indian conditions expression "Undue hardship" is normally related to economic hardship. "Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. For a hardship to be 'undue' it must be shown that the particular burden to have to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. The word "undue" a....