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Challenge to orders passed by Customs Excise and Gold (Control) Appellate Tribunal regarding classification of stationary cells/batteries as batteries and imposition of penalty. Analysis: The petitioner, a manufacturing company, challenged the Tribunal's order claiming that a single cell can be considered a battery both commercially and technically. They manufacture two-volt cells/batteries for stationary applications, emphasizing the distinct use and construction of stationary batteries compared to other storage batteries. The company had been claiming exemption under a specific notification since 1955, supported by approved classification lists and gate passes. However, a show cause notice was issued in 1994 alleging that the goods were not stationary batteries, leading to a demand for payment and imposition of a penalty. The Tribunal rejected the petitioner's plea for exemption based on prima facie merits and limitations, directing a deposit of Rs. 2 crores. Despite a subsequent application for modification, the Tribunal upheld the deposit requirement but extended the time for payment. The petitioner argued for exemption based on a previous court decision linking 'hardship' in Section 35F of the Central Excise Act to a prima facie case. The respondent contended that the Tribunal's discretion was valid, emphasizing the lack of hardship for the petitioner. The High Court found that the Tribunal's decision on the petitioner's prima facie case was erroneous, noting the long history of exemptions claimed and approved for the goods in question. The Court highlighted the petitioner's strong case regarding limitations and undue hardship due to the financial strain of the payment on their working capital. The matter was remanded to the Tribunal for reconsideration, emphasizing the petitioner's prima facie case and the need for proper consideration of relevant factors. The Court set aside the Tribunal's orders and directed a fresh consideration of the petitioner's application under Section 35F, emphasizing the existence of a prima facie case. The Tribunal was tasked with deciding on the exemption from pre-deposit and ensuring the protection of the Revenue's interest in accordance with the law. Both parties agreed that the issue was a question of law, allowing the case to be decided without affidavits, with the respondents' non-filing of an affidavit-in-opposition deemed as non-admission of the allegations.
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