1987 (1) TMI 108 - HC - Central Excise

Summary

Issues:
Challenge against Ext. P-1 notice, Ext. P5 order, and Ext. P10 order.

Analysis:
The petitioner, engaged in manufacturing excisable goods, faced a demand for duty and penalty after a surprise visit by Central Excise Department officers. Ext. P5 order demanded a substantial amount, leading to an appeal before the Appellate Tribunal. The petitioner also sought a stay on recovery through Ext. P8 and P9 applications. The High Court rejected the plea to quash Ext. P1 and P5, emphasizing the statutory appeal route. However, the focus shifted to Ext. P10, where the petitioner argued undue hardship due to financial constraints and lack of opportunity to present his case earlier. The Court stressed the importance of considering the merits of the case and the economic circumstances of the assessee in such situations. It highlighted the need for a prima facie view of the appeal's merits before insisting on a pre-deposit, as per the proviso to S. 35F of the Act.

The Central Government Standing Counsel contended that Ext. P10 was reasonable, considering the financial background of the assessee. However, the Court found that the Appellate Tribunal failed to adequately consider the essential aspects and merits of the case while exercising its discretion under S. 35F of the Act. It noted the failure to address the undue hardship that the petitioner might face if the duty and penalty were not dispensed with. Citing a previous judgment, the Court emphasized that the interest of the Revenue should not overshadow the assessee's circumstances in waiving the deposit requirement. Consequently, the Court held Ext. P10 order as flawed and directed the Appellate Tribunal to reconsider the matter in line with the law and the observations made.

Additionally, the petitioner raised concerns about revenue recovery proceedings following Ext. P5 order. While the Court did not directly challenge the recovery proceedings, it advised the petitioner to approach the authorities for a stay on the implementation of Ext. P5 order pending the appeal. Ultimately, the Court disposed of the Original Petition, quashing Ext. P10 order and instructing a re-consideration while adjourning the appeal hearing.

Issue photostat copy of the judgment to counsel for the petitioner on usual terms.