2014 (2) TMI 403 - HC - Central Excise

Waiver of pre deposit - petitioner herein was assessed provisionally on the basis of the investigation done by the designated authority with reference to levy of anti-dumpting duty - petitioner pointed out that when the order had already been made by the Co-ordinate Bench on an identical circumstance, the first respondent should give exemption of duty and take up the appeal on merit - Held that - question of pre-deposit or otherwise, only the prima facie case and balance of convenience is to be considered. The appellant is not only required, to plead undue hardship, but also to establish the same before the Tribunal. The order of the Tribunal refers to the financial hardship pleaded by the appellants in the course of hearing on the basis of balance sheet of 2001-02. The Tribunal has recorded factual findings that the said hardship pleaded by the appellants on the basis of balance sheet for 2001-2002 is not sufficient. Only considering the financial difficulties expressed by the appellant, the learned single judge directed the appellant to deposit Rs. 75 lakhs. The appellant has not produced any further material to establish undue hardship - Decided against assessee.

Summary

Issues Involved:
1. Validity of the imposition of anti-dumping duty.
2. Retrospective operation of Notification No. 138 of 2002.
3. Requirement of pre-deposit for hearing the appeal.
4. Consideration of undue hardship for waiving pre-deposit.

Detailed Analysis:

1. Validity of the Imposition of Anti-Dumping Duty:
The appellant contested the demand of Rs. 2,73,31,320/- towards anti-dumping duty on Compact Fluorescent Lamps (CFL) imported from China. The initial provisional anti-dumping duty was imposed by Notification No. 128/2001, which was effective until June 20, 2002. The final Notification No. 138 of 2002, issued on December 10, 2002, made the levy effective from December 21, 2001. The appellant argued that the goods imported after June 20, 2002, were not liable for anti-dumping duty as the provisional notification had ceased to operate.

2. Retrospective Operation of Notification No. 138 of 2002:
The appellant contended that Notification No. 138 of 2002, dated December 10, 2002, could not have retrospective operation. They argued that Section 9A(3) of the Customs Tariff Act, 1975, does not permit the revival of a notification that has ceased to operate. The authorities, however, maintained that the notification explicitly stated that the anti-dumping duty was leviable from December 21, 2001, and thus, the duty was validly imposed.

3. Requirement of Pre-Deposit for Hearing the Appeal:
The appellant challenged the order of the Commissioner (Appeals) and the CESTAT, which directed a pre-deposit of the entire anti-dumping duty amount for the appeal to be heard. The Tribunal, after referring to several decisions, concluded that it was just and proper to direct the appellant to make the pre-deposit. The Tribunal found that the financial hardship claimed by the appellant, based on the balance sheet of 2001-2002, was not sufficient evidence to dispense with the pre-deposit.

4. Consideration of Undue Hardship for Waiving Pre-Deposit:
The appellant sought a waiver of the pre-deposit, citing financial difficulties. The learned single judge, considering the financial difficulties, directed the appellant to deposit Rs. 75 lakhs instead of the entire amount. The appellant argued that undue hardship should be considered in waiving the pre-deposit. Under Section 35F of the Central Excise Act, the Tribunal is obliged to consider undue hardship and safeguard the interests of Revenue. The Supreme Court has held that undue hardship typically refers to economic hardship and must be disproportionate to the requirement.

The Tribunal and the learned single judge found that the appellant did not establish undue hardship sufficiently. The balance sheet from 2001-2002 was deemed insufficient to prove financial hardship. Consequently, the direction to deposit Rs. 75 lakhs was upheld, and the writ appeal was dismissed.

Conclusion:
The High Court dismissed the writ appeal, confirming the order of the learned single judge, which required the appellant to deposit Rs. 75 lakhs for the appeal to be heard. The court emphasized that the issues of the validity of anti-dumping duty and the retrospective operation of the notification are to be determined by the CESTAT. The court also highlighted that undue hardship must be sufficiently proven to waive the pre-deposit requirement.