2005 (12) TMI 99 - HC - Central Excise

Summary

Issues:
Challenge to the order of Customs Excise and Service Tax Appellate Tribunal for partial waiver of deposit of demand for appeal.

Analysis:
The petitioners filed a writ petition against the Tribunal's order partially allowing the waiver application, directing a deposit of Rs. 15 lakhs out of outstanding dues of Rs. 56,06,662.00. The petitioner argued that the Tribunal erred in not granting full waiver, emphasizing that their unit had been closed since 1997, and the demand was based on irrelevant documents. They also claimed a lack of proper hearing during adjudication. In contrast, the Standing Counsel contended that the impugned order was discretionary, citing financial hardship as a factor considered by the Tribunal.

Upon careful consideration, the Court referred to the Division Bench decision in M.C. Goel v. Union of India, stressing the need to avoid undue hardship when requiring deposits. The petitioner's plea on the demand being time-barred was also raised, citing Luxco Electronics v. Union of India. The Court noted that the petitioner was asked to deposit Rs. 15 lakhs out of a total demand amount, penalty, and personal penalty. The Proviso to Section 35F of the Central Excise Act allows the Tribunal to dispense with deposits causing undue hardship, safeguarding revenue interests.

Considering the petitioner's closed unit since 1997, the Court modified the Tribunal's order, directing a deposit of Rs. 5 lakhs within one month and an indemnity bond for the disputed amount. Failure to comply would result in the appeal not being entertained. However, if conditions were met, the Tribunal would hear and decide the appeal on its merits, aiming for a prompt disposal within three months post-deposit. The writ petition was finally disposed of based on these directions.