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Issues:
Challenge to order under Sec. 35F of Central Excises and Salt Act 1944. Analysis: The petitioner challenged the order passed by the 2nd respondent under Sec. 35F of the Central Excises and Salt Act 1944. The petitioner had preferred an appeal to the 2nd respondent along with an application under Sec. 35F of the Act, claiming a refund of Rs. 3,00,99,579.96. The 2nd respondent directed the petitioner to deposit 25% of the duty payable and furnish an unconditional bank guarantee for the balance within six weeks. The respondents filed a counter affidavit stating that a refund of Rs. 3,38,75,548.80 had been sanctioned to the petitioner. The petitioner argued that the impugned order was passed mechanically without proper consideration. The relevant provision, Section 35F of the Act, allows for the deposit of duty pending appeal, with a provision to dispense with such deposit in cases of undue hardship. The petitioner relied on legal precedents to support their argument that when an amount is due from or refundable by the Department, it should be considered before insisting on payment for future periods. The Department, on the other hand, contended that the impugned orders were passed to protect the interests of revenue. The Court considered the arguments and materials on record and concluded that the impugned order should be set aside. The Court emphasized that the Department should take into account refund orders obtained by the petitioner before demanding payment of duty. Referring to legal precedents, the Court highlighted the importance of considering refundable amounts before making any recovery against an assessee. The Court found that the impugned order was passed mechanically without proper application of mind and directed the 1st respondent to reconsider the application, taking into account the petitioner's undertaking not to withdraw the refund amount until the appeal is disposed of. The 1st respondent was directed to dispose of the application within four weeks. In conclusion, the Court set aside the impugned order and directed a fresh consideration of the petitioner's application, emphasizing the importance of considering refundable amounts before demanding payment of duty. The Court highlighted the need for a proper application of mind by the authorities when passing such orders and emphasized the importance of protecting the interests of the assessee in line with legal precedents.
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