2005 (11) TMI 75 - HC - Central Excise

Summary

Issues:
1. Modification of stay order directing pre-deposit by Customs, Excise and Service Tax Appellate Tribunal.
2. Financial hardship faced by the petitioner due to factory closure.
3. Jurisdiction of High Court under Article 226 of the Constitution of India to modify interlocutory orders.

Analysis:
1. The Customs, Excise and Service Tax Appellate Tribunal had directed the petitioner to pre-deposit Rs. 30 lakhs to cover the admitted liability, considering financial hardship. The petitioner deposited Rs. 10 lakhs and sought waiver of the balance amount due to factory closure and inability to pre-deposit. The Tribunal rejected the application for modification. The High Court, after considering the closure of the industry since June 2003 and severe financial constraints faced by the petitioner, modified the Tribunal's order. The High Court directed the Tribunal to hear the appeal on merits and dispose of it within four months, granting waiver of the balance amount of Rs. 20 lakhs.

2. The High Court noted that the petitioner's industry had been closed since June 2003 as per the communication from the Joint Commissioner of Customs and Central Excise. This closure indicated the financial difficulties and the inability of the petitioner to make the necessary pre-deposit as ordered by the Tribunal. Despite the general reluctance to interfere with interlocutory orders, the High Court found it appropriate to modify the order due to the petitioner's circumstances, ensuring that the financial hardship caused by the factory closure was taken into account.

3. The High Court, while acknowledging the general principle of non-interference with interlocutory orders, exercised its jurisdiction under Article 226 of the Constitution of India in this case. The Court considered the unique circumstances of the petitioner, particularly the closure of the industry and the resulting financial constraints. By modifying the Tribunal's order and granting waiver of the balance amount, the High Court ensured that the appeal could be heard on merits without imposing undue financial burden on the petitioner. The Court directed expeditious disposal of the appeal within a stipulated period, balancing the interests of justice with the petitioner's financial difficulties.

This judgment highlights the importance of considering individual circumstances and financial hardships in legal proceedings, demonstrating the High Court's role in ensuring fairness and justice while interpreting and applying the law.