2012 (2) TMI 510 - HC - Central Excise

Summary

Issues involved: Challenge to order rejecting application for interim stay u/s Article 226 of the Constitution of India, refusal to allow waiver of pre-deposit of duty, fine, and penalty, absence of reasons in the impugned order, consideration of grounds raised by petitioner in the application u/s Section 35(F) of the Central Excise Act, 1944.

Challenge to order rejecting application for interim stay: The petitioner challenged the order dated 21.10.2010 passed by the Commissioner (Appeals) Customs & Central Excise, Indore, which rejected the petitioner's application for interim stay. The petitioner contended that the Commissioner erred in refusing to allow the application, claiming a prima facie case on merits and likelihood of exoneration from payment. The petitioner argued that the insistence on pre-deposit should have been waived, and the impugned order lacked reasons, necessitating its quashing and remand for re-decision.

Refusal to allow waiver of pre-deposit: The learned counsel for the petitioner argued that the Commissioner's rejection of the application seeking waiver of pre-deposit of duty, fine, and penalty was erroneous. The Commissioner observed that the petitioner failed to establish a prima facie case of undue hardship, leading to the rejection of the application for waiver of pre-deposit of dues. The order was deemed unreasoned as it did not consider the grounds raised by the petitioner, including reliance on judgments supporting the contention of a strong case on merits.

Absence of reasons in the impugned order: The High Court found that the Commissioner did not consider the various grounds raised by the petitioner in the application for dispensation of pre-deposit of duty, fine, and penalty. The order was considered unreasoned and mechanical, failing to address the contentions presented by the petitioner. The Court held that the order lacked proper reasoning and required a fresh consideration by the Commissioner.

Consideration of grounds raised by petitioner: The Court noted that the petitioner had raised valid grounds in the application for waiver, citing judgments to support the claim of a strong case on merits and the potential undue hardship from pre-deposit requirements. The Commissioner's failure to address these contentions led to the decision to allow the petition, set aside the impugned order, and remand the matter back to the Commissioner for a fresh consideration of the application for waiver.

Conclusion: The High Court allowed the petition, remitted the matter back to the Commissioner for a fresh decision on the application for waiver, emphasized the need for a reasoned order, and maintained the interim protection granted to the petitioner until the Commissioner's new order is passed.