1992 (4) TMI 55 - HC - Central Excise

Strictures against Appellate Tribunal (CEGAT) - Stay/Dispensation of pre-deposit - Writ jurisdiction

Summary

Issues:
Challenge to order passed by Customs, Excise and Gold (Control) Appellate Tribunal regarding pre-deposit of duty and penalty.

Analysis:
The petitioner, a manufacturer of motor vehicles, challenged an order by the Tribunal directing a pre-deposit of Rs. 8 lakhs for a duty amounting to Rs. 23,17,959.24 and a penalty of Rs. 7 lakhs. The petitioner contended that no further duty was payable as the full amount had already been paid. The Tribunal, while acknowledging the merits of the case, directed the petitioner to deposit Rs. 8 lakhs for stay of realisation. The petitioner argued that the excise authorities were demanding double the duty amount already paid, and the Tribunal failed to properly examine the justification of the demand.

The jurisdiction of the High Court to entertain the petition was challenged, citing Article 323B of the Constitution and Section 35C(4). However, the Court held that the Tribunal was not constituted under Article 323B, and Section 35C(4) did not oust the High Court's jurisdiction. The enactment of the Customs and Excises Revenues Appellate Tribunal Act, 1986, further supported the High Court's jurisdiction in the matter.

The Court distinguished the case of S.P. Sampath Kumar v. Union of India, stating that it was not applicable in the present scenario. The issue of territorial jurisdiction was raised, referring to a previous case, but the Court held that as the impugned order was passed in Delhi, the Court had territorial jurisdiction to hear the petition.

On the merits of the case, the Court noted that the excise department had already received duty from both the petitioner and the body builder, amounting to the duty payable if all operations were carried out by the petitioner alone. The Court found that the petitioner had a strong prima facie case and that the Tribunal had failed to properly exercise its jurisdiction. The Court allowed the writ petition, quashed the Tribunal's order, and directed the Tribunal to hear the appeal on merits without requiring any further pre-deposit of duty and penalty.

In conclusion, the Court emphasized that financial hardship alone should not be a criterion for interfering with interlocutory orders and that a good prima facie case should be established. The Court found the petitioner's case to be strong and ruled in favor of the petitioner, allowing the appeal to be heard without any additional pre-deposit requirements.