1995 (11) TMI 93 - HC - Central Excise

Issues:
1. Challenge to the order of the Tribunal directing a pre-deposit of duty and penalty.
2. Application of the Proviso to Section 35F of the Central Excise Act.
3. Allegations of limitation on the proceedings.
4. Marketability of the product in question.
5. Sufficiency of reasons provided by the Tribunal in its order.
6. Consideration of overall hardship in imposing conditions for waiver of deposit.
7. Jurisdiction of the High Court under Article 226 of the Constitution of India.

Analysis:
1. The Writ Petition was filed challenging the Tribunal's order directing the petitioner to make a pre-deposit of Rs. 1.75 Crores and furnish a bank guarantee for the balance amount of duty. The appeal before the Tribunal was against the demand of difference in duty and penalty imposed by the Collector of Central Excise. The respondents alleged that the petitioner had not paid the Central Excise duty for manufacturing Calcium-bi-sulphite solution, which did not have any specific exemption from excise duty. The Tribunal directed a partial deposit of the duty and a bank guarantee, leading to the filing of the Writ Petition.

2. The petitioners invoked the Proviso to Section 35F of the Central Excise Act, seeking a waiver of the pre-deposit requirement to proceed with the appeal. The Tribunal, after hearing both parties, concluded that the petitioners had not made a strong case on merits or limitation but directed a partial deposit and bank guarantee. The petitioners contended that the Tribunal failed to consider the overall hardship caused by the conditions imposed.

3. The petitioner argued that the proceedings were barred by limitation and that the product in question was not marketable, thus not attracting excise duty. The Tribunal's order was criticized for being non-speaking and lacking sufficient reasons. The petitioner claimed that the Tribunal should have allowed the application without conditions due to the lack of accurate data on the differential quantity.

4. The respondents contended that the inaccuracy in data was due to varying details provided by the petitioners themselves, indicating a lack of proper record-keeping. They argued that the Tribunal's order was reasonable and should not be interfered with, as only a portion of the duty was directed to be paid pending appeal.

5. The High Court analyzed the submissions of both parties and emphasized that it should not delve into the merits of the appeal pending before the Tribunal. The Court's role was supervisory, ensuring the Tribunal applied relevant considerations. The Court noted that the Tribunal had sufficiently considered the matter in its order and rejected the petitioner's claim of non-application of mind and lack of reasons.

6. The Court acknowledged the difficulties expressed by the petitioner and modified the Tribunal's order by reducing the deposit amount and providing a deadline for furnishing a bank guarantee. The Court found that the Tribunal had considered overall hardships and upheld the order with modifications, dismissing the writ petition in other respects.

7. The High Court clarified its jurisdiction under Article 226 of the Constitution of India, emphasizing that it should only interfere if the Tribunal's order was unreasonable or shocking to the conscience of the Court. The Court's role was to ensure the Tribunal applied its jurisdiction properly, without acting as an appellate authority over the Tribunal's decision.

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