2008 (3) TMI 342 - HC - Central Excise

Stay/Dispensation of pre-deposit - Undue hardship - Held that - As the Tribunal dismissed the application on 23-1-2001 and therefore the petitioner moved this Court in March 2001. It cannot therefore be said that this petition suffers from delay laches and acquisance. Even otherwise looking to the injustice done to the petitioner-company this is a fit case where this Court would entertain this petition. Since the petitioner s appeal was dismissed only on the ground of non-compliance with the condition stipulated in the stay order in the facts and circumstances of the case we are inclined to set aside the order dismissing the petitioner s appeal and also the stay order dated 20-6-1997 and we are inclined to direct the Tribunal to hear the petitioner s appeal on merits and consider the petitioner s submission whether the petitioner is entitled to the benefit of judgment of the Tribunal rendered on 25-9-2000 as confirmed by the Hon ble Supreme Court on 19-4-2006. Petition is allowed.

Issues:
1. Tribunal imposing a harsh pre-deposit condition on the petitioner for hearing the appeal.
2. Dispute over the classification of products manufactured by the petitioner.
3. Allegation of undue harshness in the pre-deposit condition imposed by the Tribunal.
4. Appeal dismissal based on non-compliance with the pre-deposit condition.
5. Comparison with similar cases where appeals were allowed by the Tribunal and Supreme Court.
6. Petitioner seeking restoration of appeal and relief from the High Court.

Issue 1: Tribunal's Harsh Pre-deposit Condition
The Tribunal imposed a pre-deposit condition of Rs. 1 crore on the petitioner for hearing the appeal challenging the Central Excise Commissioner's order. The petitioner faced financial hardship and was unable to comply, leading to appeal dismissal.

Issue 2: Product Classification Dispute
The dispute revolved around whether the petitioner's products fell under a specific Central Excise Tariff heading, similar to products manufactured by other units. The Tribunal's order for pre-deposit was based on sales revenue, affecting the petitioner's ability to defend the classification.

Issue 3: Allegation of Undue Harshness
The petitioner argued that the pre-deposit condition was excessively harsh, considering the financial position of the company. The Tribunal's order was deemed unreasonable, especially when compared to similar cases where smaller pre-deposits were accepted.

Issue 4: Appeal Dismissal
The Tribunal dismissed the petitioner's appeal solely due to non-compliance with the pre-deposit condition, leading to property attachment by the department. The petitioner contended that the dismissal was unjust, especially after the successful appeals of similar manufacturers.

Issue 5: Comparison with Similar Cases
The petitioner sought relief based on the outcomes of appeals by other manufacturers in similar situations, which were allowed by the Tribunal and confirmed by the Supreme Court. This comparison highlighted the disparity in treatment by the Tribunal.

Issue 6: Restoration of Appeal and Relief
The High Court acknowledged the undue harshness of the pre-deposit condition and set aside the orders dismissing the appeal. The Court directed the Tribunal to hear the petitioner's appeal on merits without any pre-deposit conditions, emphasizing the need for expeditious resolution within three months.

In conclusion, the High Court granted relief to the petitioner, setting aside the harsh pre-deposit condition imposed by the Tribunal and restoring the appeal for a fair hearing on merits without financial constraints. The judgment emphasized the need for equitable treatment and timely resolution of the dispute, ensuring justice for the petitioner in line with similar cases decided by higher courts.

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