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Issues:
Challenge to impugned order on pre-deposit under Section 35F of Central Excise Act, 1944. Analysis: 1. The writ petitioners challenged the order dated 16th June, 1999, requiring a pre-deposit of Rs. 50 lakhs under Section 35F of the Central Excise Act, 1944. The disputes involved discounts, distribution expenses, sales tax, and notional interest. 2. The appellate authority upheld distribution expenses and sales tax but remanded other issues for further hearing. The order of demand was to be considered by the Assistant Commissioner following guidelines based on the Metal Box (I) Ltd. v. CCE, Madras case. 3. The petitioners argued that the maximum demand, excluding distribution expenses and sales tax, would be Rs. 4,20,291.09, making the pre-deposit of Rs. 50 lakhs disproportionate. 4. Section 35F allows for a deposit pending appeal, with discretion to dispense with the deposit if it causes undue hardship. The petitioners contended that the authority should impose pre-deposit rationally, considering a prima facie case and hardship. 5. Legal precedents were cited to support the argument that a prima facie case need not guarantee success but should be arguable. Similar judgments under the Customs Act and Central Excise Act emphasized the importance of considering the appellant's case and conduct. 6. The respondents argued for the imposition of pre-deposit based on the confirmed demand and relevant legal judgments regarding notional interest and distribution expenses. 7. The court found a prima facie case regarding notional interest and questioned the remand of issues while imposing a penalty under Section 35F, deeming it unsustainable. 8. The judgment clarified that notional interest cannot be added to the assessable value based on Supreme Court rulings. 9. The writ petition was disposed of, directing the authority to reconsider the pre-deposit in light of the judgment within four weeks, subject to depositing the admitted sum. The pre-deposit of Rs. 50 lakhs was not sustained pending the authority's reconsideration. 10. No costs were awarded, and parties were entitled to certified copies of the judgment within seven days.
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