2011 (2) TMI 1360 - HC - Central Excise

Summary

Issues involved: Challenge to conditional stay order granted by CESTAT, violation of principles of natural justice, consideration of undue hardship.

Conditional Stay Order Challenge: The petitioner challenged the order passed by CESTAT granting a conditional stay order, claiming entitlement to three adjournments which were not granted. The petitioner argued that the impugned order violated principles of natural justice by not considering undue hardship. However, the High Court found no merit in the contention, stating that the petitioner, before exercising the right of statutory appeal, is expected to make a pre-deposit of the duty found due by the original authority. The Court clarified that the right to three adjournments for addressing arguments on merits is separate from the right to be heard regarding waiver of pre-deposit and interim stay order. The Court upheld the decision of the appellate authority to decline adjournment and consider the case, noting the mis-declaration of the country of origin in the consignment. The Tribunal granted a conditional stay requiring a deposit of Rs. 10 crores, despite the petitioner not being represented.

Consideration of Undue Hardship: The Court referred to the case of Benara Valves Ltd. v. Commissioner of Central Excise, emphasizing the twin requirements of considering undue hardship and imposing conditions to safeguard the interest of the Revenue. It was highlighted that undue hardship must be established by the applicant for waiver and mere assertion is insufficient. The term 'undue hardship' was explained to mean excessive hardship greater than warranted by the circumstances. In the present case, the mis-declaration by the petitioner led to Anti-dumping duty of Rs. 16,64,78,338.00 in addition to a penalty. Despite the absence of the petitioner's Counsel, the Tribunal granted a stay order on the condition of a Rs. 10 crores deposit, showing consideration even in the petitioner's absence.

Conclusion: The High Court concluded that the impugned order was not vitiated for failing to follow principles of natural justice. Even when considering undue hardship, the order passed was deemed to satisfy the necessary test. The Court found no merits in the petitioner's contentions and dismissed the challenge to the conditional stay order.