2007 (8) TMI 363 - HC - Central Excise

Summary

Issues:
1. Waiver of pre-deposit in a case involving liability for duty imposed on a State-owned company.
2. Disagreement on the availability of a prima facie case by the CESTAT.
3. Interference under Article 226 of the Constitution of India regarding the direction to deposit a sum of Rs. 3 lakhs.
4. Delay in the hearing of the appeal due to non-payment of the pre-deposit amount.
5. Consideration of the directed deposit amount as negligible for the State-owned company.
6. Dismissal of the Writ Petition but direction to dispose of the appeal within three months of the order.

Analysis:
The judgment concerns a State-owned company (referred to as TANSI) facing a duty liability issue for fabricating units for BHEL. The company sought a waiver of pre-deposit during the appeal process before the CESTAT. The CESTAT rejected the waiver application, citing the lack of a strong prima facie case and directed TANSI to deposit Rs. 3 lakhs under Section 35(F) of the Central Excise Act. The company then filed a writ petition challenging this decision. The High Court, after an interim order to deposit the amount, faced an appeal by TANSI against this directive, arguing that depositing the amount would render the writ petition ineffective. The matter returned to the court for a final hearing.

During the final hearing, the court emphasized that the discretion to waive pre-deposit lies with the CESTAT, and in this case, the disagreement over the prima facie case did not warrant interference under Article 226 of the Constitution of India. The court highlighted that had TANSI paid the deposit initially, the appeal would have concluded earlier, indicating a delay caused by non-compliance. Despite the negligible nature of the directed deposit for a State-owned company like TANSI, the court deemed the writ petition misconceived and dismissed it. However, recognizing the prolonged pendency of the appeal, the court directed the respondents to dispose of the appeal within three months of the order once the pre-deposit is made.