2002 (11) TMI 113 - HC - Central Excise

Summary

Issues:
Challenge to order directing deposit for appeal under Section 35-F of Central Excise Act, 1944.

Analysis:
1. Background Facts and Show Cause Notices:
The petitioner, engaged in printing glazed tiles, faced demands for excise duty and penalties for allegedly availing SSI exemption illegally due to using tiles bearing other manufacturers' brand names. Adjudicating authority confirmed demands, leading to a total of Rs. 18,89,718 against the petitioner.

2. Appeals and Tribunal Order:
Petitioner's appeals to Commissioner, Central Excise (Appeals) and subsequent appeal to Tribunal were unsuccessful. Tribunal ordered deposit of Rs. 14 lakhs as a pre-condition for entertaining the appeal, citing lack of strong prima facie case by the petitioner.

3. Legal Analysis of Tribunal's Order:
The High Court analyzed the legal provisions under Section 35F of the Act, emphasizing that depositing the demanded amount is a condition for appeal, with discretion for waiver if it causes undue hardship. The Court highlighted factors for waiver consideration, including a prima facie case, balance of convenience, irreparable loss, and public interest.

4. Court's Decision and Reasoning:
The Court refrained from delving into the eligibility for SSI exemption and focused on whether the Tribunal correctly exercised discretion in ordering the deposit. It found the Tribunal overlooked material facts and relevant exemption notifications, causing undue hardship to the petitioner. The Court noted that the petitioner did not consciously affix brand names and that erasing pre-casted brands on tiles was impractical.

5. Conclusion and Court's Ruling:
Considering financial hardship and the strong case made by the petitioner, the Court allowed the petition, setting aside the Tribunal's order. The Court directed the Tribunal to hear the appeal without insisting on the pre-deposit, emphasizing the importance of considering all relevant facts and avoiding undue hardship on the petitioner. No costs were awarded in the matter.