TaxTMI 
TaxTMI 
2006 (5) TMI 94
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....sp; In the said appeal, the petitioner filed a stay application under Section 35F of the Central Excise Act, 1944 (hereinafter referred to as the Act) seeking stay and to dispense with the requirement of pre-deposit of duty. By an interim order No. 02/0-1/2006, dated 25-1-2006, the respondent herein directed the petitioner to pre-deposit a sum of Rs. 50,00,000/- (Rupees Fifty Lakhs only) on or before 15-3-2006 and directed that on payment of the said pre-deposit amount, payment of remaining/balance part of the duty demanded in the case will stand waived till the final disposal of the appeal. It was further ordered that it will be open to the petitioner herein, if convenient, to have the pre-deposit amount deposited immediately and thereafter file an application for out of turn hearing. Thereafter, the petitioner filed a modification petition before the respondent on 23-3-2006. But the said modification petition was also dismissed by the respondent. Being aggrieved by the said orders, the above writ petition has been filed. 3.The main contention of the petitioner that has been raised in the writ petition is that the petitioner earlier filed an appeal before ....
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....ior Counsel strenuously contended that the CESTAT in its order has clearly held that a prima facie case exists in favour of the petitioner and when the Tribunal itself has held so, the respondent ought to have considered the same and granted the unconditional stay and waived pre-deposit. The learned Senior Counsel referred to the following observation of the respondent in the impugned order, which reads as follows : At the same time, since the issue concerned is not totally free from doubt and the appellants also contend that they have a good case on merits, requiring pre-deposit of the full amount of Central Excise duty demanded, as requested by the Department, would also be unjust to the appellant. The present appeal will also require indepth and detailed study and analysis, which exercise will not be possible to be completed in a hurry. Keeping all these factors in mind, I am of the opinion that in addition to the amount of Rs. 50,00,000/realized by the Department by way of liquidation of Bank Guarantee, a pre-deposit under Section 35F of the Central Excise Act, 1944 of Rs. 50,00,000/- would be in order, and meet the ends of justice in this case, and submitted that the responde....
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.... a prima facie case has to be examined as to whether the appellant is liable to make the payment at all and in case the appellant has a case on merit, the respondent cannot reject the application. 6.Per contra, Mr. K. Ramakrishna Reddy, learned Senior Central Government Standing Counsel submitted that against the impugned order passed by the respondent, an appeal will lie to the CESTAT under Section 35B of the Act and as such the writ petition itself is not maintainable. He further submitted that jurisdiction under Article 226 of the Constitution of India cannot be exercised only for the purpose of granting the relief of interim nature when the main matter is to be decided by another authority viz., the respondent herein. He further submitted that no financial hardship has been pleaded by the petitioner and the submissions made by the learned Senior Counsel for the petitioner are not based on the averments contained in the affidavit. He further submitted that the appeal filed by the petitioner before CESTAT was against the order of the Commissioner of Appeals rejecting the appeal filed by the petitioner on the ground of delay and the CESTAT held that the appeal was filed in time b....
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....en Section 35B of the Act enumerates appealable orders against which the appeal lies to the Tribunal, the appeal can be filed to the Tribunal only, against those enumerated orders alone, not against any other orders. Therefore, the contention of Mr. K. Ramakrishna Reddy is not acceptable. 8.The learned Senior Counsel Mr. Habibullab Basha also relied upon 1984 (18) E.L.T. 538 (Tribunal) [Bhushan Industrial Company (P) Ltd., v. Collector of Central Excise, Chandigarh] and 1985 (19) E.L.T. 83 (Tribunal) [International Computers v. Collector of Central Excise], wherein the CEGAT New Delhi has held that an appeal against rejection of stay petition is not maintainable under Section 35B of the Act. The said two decisions supports the view taken by this Court. Accordingly this Court holds that the above writ petition is maintainable and no appeal will lie to CESTAT against the order of the Commissioner of Appeals passed under Section 35F of the Act. 9.In 1994 (69) E.L.T. 193 (Cal.), it is laid down as follows : As'31. already seen the phrase "undue hardship" would cover a case where the appellant has a strong prima facie case. The phrase also in my view covers a situation where there i....
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....ong prima facie case made out in favour of petitioner - Stay granted. (v) In the decision reported in 2003 (154) E.L.T. 347 (S.C.), it is observed as follows : 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 determined the quantum of deposit taking into consideration the financial hardship and other such relevant factors. (vi) In the decision reported in 2005 (182) E.L.T. 450 (S.C.), the Head Note reads as follows : Stay/Dispensation of pre-deposit - While deciding the application Court must apply its mind as to whether the appellant has a strong prima facie case on merit - If an appellant having strong prima facie case, is asked to deposit the amount of assessment so made or penalty so levied, it would cause undue hardship to him, though there may be no financial restrain on the appellant. S....
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....) M.L.J. 664, on the ground that the granting of the interim relief sought for in that case will infructuate the very order of confiscation, the Hon'ble Division Bench held so. But, the present writ petition is directed against an interim order passed by the Appellate Authority and even if any interim relief is granted, it will not infructuate the appeal pending before the Appellate Authority. Whatever be the order that may be passed in this writ petition, it will not in any way affect the disposal of the appeal pending before the respondent herein and as such the above decision is not applicable to the facts of this case. Therefore, the contention of the learned Standing Counsel is not acceptable. 12.He also relied upon the case of Assistant Collector of Central Excise, West Bengal v. Dunlop India Limited and others reported in 1985 (19) E.L.T. 22 (S.C.). In that decision, paragraph 5 reads as follows : We repeat and deprecate the practice of5. granting interim order which practically give the principal relief sought in the petition for no better reason than that a prima facie case has been made out, without being concerned about the balance of convenience, the public interest a....
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....er back to the Appellate Authority for determining the issue under Section 35F of the Act, as the Appellate Authority has not at all considered the prima facie merits of the case and the judgment of the Supreme Court reported in 1985 (19) E.L.T. 22 (S.C.) (3 judges) was not brought to the notice of the Hon'ble Court. 14.In the light of the law laid down by the Supreme Court in 1985 (19) E.L.T. 22 (S.C.), the correctness of the impugned order passed by the respondent has to be judged. In the impugned order dated 25-1-2006, the respondent has considered the fact that the Adjudicating Authority has decided the issue of classification with relation to the impugned product viz., Face wash and has confirmed the demand of differential duty and the differential duty demanded is Rs. 3,13,17,442/- and the amount realized by way of liquidation of Bank Guarantee was only Rs. 50,00,000/- and further sum of Rs. 2,63,17,442/- was still required to be deposited in terms of Section 35F of the Act. Considering the fact that the huge amount is due and also considering the fact that the issue concerned is not totally free from doubt and also taking into account the contention of the appellant regardi....