2009 (6) TMI 107 - HC - Central Excise

Summary

Issues:
Challenge against the order of pre-deposit passed by the Tribunal.

Analysis:
The petitioners contested the Tribunal's order directing them to deposit 50% of a substantial sum. The petitioners argued that despite the Tribunal acknowledging arguable points, it unjustly refused to waive the entire pre-deposit amount due to the company's situation under the BIFR. They emphasized that commercial production had not commenced at one unit, and only trial production occurred in 2000. The petitioners sought to set aside the order and have the entire deposit waived.

On the respondents' side, it was contended that the Tribunal had appropriately addressed the issues. They highlighted that the proceedings before the BIFR had abated, and referring to a specific case, they mentioned the sale of the company's assets and the realization of substantial funds. The respondents urged the Court not to interfere with the Tribunal's decision.

Upon hearing both parties, the Court recognized that the Tribunal's acknowledgment of issues implied a prima facie case with strong arguable points, not necessarily warranting a complete waiver of the duty demanded. The Court cited a Supreme Court case to support this principle. Considering the financial hardship faced by the petitioners, especially after the BIFR's jurisdiction over the company's case was terminated due to asset sales, the Court deemed it necessary to allow the appeal to proceed on merits without hindrance. Therefore, the Court modified the Tribunal's order.

The Court reduced the pre-deposit amount from 50% to Rs. 2.50 crores, to be deposited within three months. Failure to comply would result in appeal dismissal, while depositing the amount would enable the Tribunal to proceed with the appeal's substantive hearing. The Court made the rule absolute accordingly, without imposing any costs on either party.