TaxTMI 
TaxTMI 
2014 (5) TMI 1061
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....bunal, Easter Regional Bench, Kolkata, refusing to modify the aforesaid order and directing the petitioner to pre-deposit Rs. 60 Lakhs and report compliance on 28th March, 2012. 3. The short question involved in this appeal is whether the learned Tribunal was justified in directing the petitioner to deposit Rs. 60 Lakhs as a condition for hearing the appeals. 4. The petitioner No. 1 carries on business, inter alia, of manufacture of diverse goods, which are excisable commodities, including re-rolled steel products, non-alloy steel ingots and sponge iron. The petitioner No. 1 has various units in West Bengal. 5. The petitioners claim to sell their finished products to independent buyers and also to their sister concerns on stock transfer basis. According to the petitioners, the petitioners supply manufactured goods to their sister concerns on payment of duty. visited the registered office of the petitioner No. 1 at Kolkata. Thereafter, on the allegation that the petitioners were clearing goods to their sister concerns at lesser value than the value at which goods were sold to independent buyers, a show-cause notice No. C. No. 11(8)28/AE/CE/Bol/2004, dated 2nd Janua....
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....ions and/or contentions in the show-cause notice. 8. Section 11A of the Central Excise Act, 1944, as it stood at the material time when the show-cause notice was issued, is set out hereinbelow for convenience :- 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within [one year] from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-pai....
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.... can be said that there was any such suppression of facts or any such contravention of the Central Excise Act to entitle the Revenue to invoke the extended period of limitation. These observation are, however, only prima facie observations which will not influence the adjudication of the pending appeals on merit. 12. The learned Commissioner confirmed the demand and imposed Penalty on the petitioners. The petitioners appealed whereupon the learned Tribunal remanded the matter to the learned Commissioner on I he ground that the Commissioner had applied a method of valuation contrary to the method approved by a larger Bench of the Tribunal. 13. Thereafter de novo proceedings were held. The petitioners claim to have submitted all documents pertaining to the disputed period i.e. from 2002 to 2005, to show that there was no undervaluation of the goods transferred to the sister concerns/units, and in any case not deliberate undervaluation to evade duty. 14. The petitioners have alleged that after the matter was finally heard on 28th May, 2008, and after the petitioners had also submitted written submissions, the Commissioner called for reports from the jurisdictional Co....
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....ending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case, the [Commissioner (Appeals)] or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the [Commissioner (Appeals)] or as the case may he, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue. Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing." 20. Section 35F provides that pending an appeal, the appellant is required to deposit the duty demanded or the penalty levied with the Appellate Authority. However, in any particular case, where the Appellate Authority is of the opinion that deposit of duty demanded or penalty levied would cause undue hardship to such person, the Appellate Authority ....
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....out a good prima facie case. 26. Where there is a very good prima facie case, pre-deposit would have to be waived altogether. Where the appellant has an arguable case, pre-deposit might be waived on such conditions as would protect the interest of Revenue. In fact, learned Tribunal was conscious of its duty to consider the prima facie case and accordingly recorded a prima facie finding with regard to the merit of the demand, but cursorily without properly applying its mind to the issues involved in the appeal. 27. In Farmania Steel Works v. Union of India reported in 2011 (274) E.L.T. 331 (Cal.) this Court set aside an order of pre-deposit because the order did not disclose reasons for directing pre-deposit of rupees four lakhs. In this case too the reasons for directing lump sum deposit of Rs. 60 lakhs have not been disclosed. 28. In Amitava Saha v. CESTAT reported in 2007 (215) E.L.T. 173 (Cal.) this Court in effect and substance held that an order of the Appellate Authority for pre-deposit of a lump sum amount, which was devoid of reasons for deposit of that amount, was in flagrant violation of principles of natural justice. 29. In CEAT Ltd. v. Union of I....
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....ellant. 33. The Appellate Authority may dispense with pre-deposit subject to such conditions as it might deemed fit to impose as to safeguard the interest of the revenue. In Benaras Valves Ltd. v. Commissioner of Central Excise reported in 2006 (204) E.L.T. 513 (S.C.) the Supreme Court held as follows :- "8. 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 matter unmindful to 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 has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, ....
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..... State of Andhra Pradesh & Ors. reported in (2009) 3 SCC 177, Ravi Gupta v. Commissioner of Sales Tax reported in 2009 (237) E.L.T. 3 (S.C.), Manotosh Saha v. Special Director, Enforcement Directorate reported in 2008 (229) E.L.T. 492 (S.C.), Indu Nissan Oxo Chemicals India Ltd. v. Union of India reported in 2008 (221) E.L.T. 7 (S.C.). 35. Compulsion to pay any unjust dues per se would cause hardship as held by the Supreme Court in B.M. Malani v. Commissioner of Income Tax reported in (2008) 306 ITR 196 (S.C.). In Vijay Prakash Mehta v. Collector of Customs reported in 1989 (39) E.L.T. 178 (S.C.) the Supreme Court held that a right to appeal is a statutory right and considering Section 129E of the Customs Act, there was discretion in the authority to dispense with the application of pre-deposit in case of undue hardship. 36. In the instant case, the learned Tribunal has cursorily considered the merits of the case. The learned Tribunal has not at all considered the question of limitation, on which, the question of jurisdiction to issue a show-cause notice for realizing a demand, depends. Admittedly, the demand was not raised within one year but almost two/three years by....
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....and. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens' faith in the impartiality of public administration, interim relief can be given." 42. Moreover, as observed by the Division Bench of Bombay High Court comprising Rebello and Karnik, JJ., in CEAT Ltd. v. Union of India reported in 2010 (250) E.L.T. 200 (Bom.) the Court cannot be oblivious of the state of economy and the need for companies to have sufficient liquidity to carry on business and/or industrial activity. Any burden by way of deposit of cash that is required to keep the business running and/or for expansion of business activities has an adverse effect on productivity, employment and the like. 43. An ad hoc amount of Rs. 60 lakhs has been directed to be deposited by way of pre-deposit. The impugned or....