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1996 (2) TMI 146 - HC - Central Excise
Issues:
Challenge to order directing pre-deposit of funds under Central Excises and Salt Act - Failure to consider financial hardship and prima facie case - Interpretation of clubbing of clearances under Central Excises and Salt Act. Analysis: The judgment involved two writ petitions challenging an order directing the petitioner to pre-deposit a sum of Rs. 3.50 lakhs under the Central Excises and Salt Act. The petitioners sought a waiver of the pre-deposit based on financial hardship and a strong prima facie case. The court noted that the 1st respondent failed to consider the prima facie case and financial position of the petitioners adequately. The court highlighted that the petitioners had a negative net current asset and a significant accumulated loss, which the 1st respondent did not take into account. The court criticized the 1st respondent for mechanically directing the deposit without proper reasoning or analysis of the petitioners' case. The judgment also discussed the interpretation of clubbing of clearances under the Central Excises and Salt Act. The court referred to a clarificatory Trade Notice issued by the Government of India and the Central Board of Excise and Customs, emphasizing that different firms should be treated as separate manufacturers. The court held that each limited company is a manufacturer by itself and entitled to a separate exemption limit. The court found that the 2nd respondent, as an adjudicating authority, failed to follow this principle, and the 1st respondent, as the appellate Tribunal, should have noticed a prima facie case based on this principle. In conclusion, the court allowed both writ petitions and quashed the impugned order directing the pre-deposit. The court highlighted the failure of the authorities to consider the financial hardship and prima facie case of the petitioners adequately. The judgment emphasized the importance of proper analysis and reasoning in such decisions and the need to follow established principles in interpreting relevant laws like the Central Excises and Salt Act.
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