1996 (9) TMI 151 - HC - Central Excise

Summary

Issues:
1. Interpretation of proviso to Section 35F of the Central Excises and Salt Act, 1944 regarding pre-deposit amount for entertaining an appeal.
2. Dispute regarding the adjustment of inputs of Visco Staple Fibre and Sodium Sulphate.
3. Applicability of Rule 57D(1) and Rule 57F(iv) of the Central Excise Rules, 1944.
4. Exercise of discretion by the Appellate Tribunal in directing pre-deposit amount.

Analysis:
The petitioner, a public limited company, challenged an order of the Customs Excise and Gold (Control) Appellate Tribunal related to the adjustment of inputs of Visco Staple Fibre and Sodium Sulphate. The Commissioner of Central Excise had demanded a significant amount from the petitioner, leading to an appeal before the Tribunal. The Tribunal directed the petitioner to deposit a sum of Rs. 1,00,00,000 for entertaining the appeal, which was contested by the petitioner in the High Court. The petitioner argued that the impugned order lacked proper consideration of relevant rulings and cited Rule 57D(1) of the Central Excise Rules, 1944 in support of their case.

On the other hand, the respondents contended that the petitioner's case fell under Rule 57F(iv) of the Rules. The High Court, after considering the arguments, focused on whether the Appellate Tribunal had properly exercised its discretion under the proviso to Section 35F of the Act regarding the pre-deposit amount for entertaining the appeal under Section 35B. The Court emphasized that the exercise of discretion by the Tribunal must be in accordance with the law and proper. It noted that while the Tribunal had considered the prima facie case of the petitioner, the pre-deposit amount of Rs. 1,00,00,000 in one lump sum would cause undue hardship to the petitioner.

In light of the circumstances, the High Court modified the Tribunal's order and directed the petitioner to pay the sum of Rs. 1,00,00,000 in four equal installments of Rs. 25,00,000 each, starting from 1-11-1996. Once the total amount was paid, the Tribunal was instructed to hear and dispose of the appeal within four weeks. The Court allowed the petitioner to make the payment in one lump sum if their financial situation improved. The writ petition was granted accordingly, providing relief to the petitioner from the burden of a lump sum pre-deposit amount.