1994 (8) TMI 43 - HC - Central Excise

Summary

Issues:
Challenge against orders of Collector and Tribunal regarding excise duty evasion, penalty imposition, and bank guarantee requirement.

Analysis:
1. The petitioner challenged the orders of the Collector and the Tribunal regarding excise duty evasion and penalty imposition. The petitioner contended that it was not financially capable of pre-depositing the demanded amount. The Tribunal initially ordered the petitioner to furnish a bank guarantee for a reduced amount, considering the petitioner's financial state. However, the petitioner faced difficulties in arranging the bank guarantee due to financial constraints and unforeseen circumstances, such as factory closure and personal injury to the Managing Director. Despite efforts to comply, the petitioner failed to furnish the bank guarantee within the extended period, leading to the dismissal of the appeal by the Tribunal.

2. The High Court analyzed the petitioner's financial position and the Tribunal's handling of the situation. The Court noted that the petitioner's financial state was not conducive to pre-depositing the demanded amount. The Tribunal's insistence on the bank guarantee, despite recognizing the petitioner's financial hardships, led to the dismissal of the appeal. The Court observed that the Tribunal should have considered dispensing with the pre-deposit condition to allow the petitioner to exercise its right to appeal. The Court emphasized that the petitioner's financial constraints should not hinder its access to the appeal process.

3. Despite acknowledging some delays and laches on the part of the petitioner, the Court found that the petitioner's right to appeal should not be frustrated due to financial limitations. The Court highlighted that the absence of a stay order on recovering the duty and penalty indicated the petitioner's financial inability to make the required deposit. Consequently, the Court partly allowed the writ petition, quashing the Tribunal's order dismissing the appeal and directing the Tribunal to proceed with the appeal on merits without the pre-deposit requirement, considering the petitioner's financial circumstances. No costs were awarded in the judgment.