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2014 (11) TMI 460 - HC - Central ExciseWaiver of pre deposit - Undue hardship - Held that - Tribunal has to form an opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person. In this case, the learned Tribunal has not made any endeavour to do so and it was swayed by the so-called bad past conduct of the petitioner. We think that there is no scope for adjudging the conduct and misconduct of the litigant when the Legislature has given a protection on certain contingency. In this situation, the Court of law for that matter the Tribunal has nothing but to find whether undue hardship will work. - Matter remanded back - Decided in favour of assessee.
Issues:
1. Dispensation of pre-deposit of penalty amount before the Tribunal. Analysis: The petitioner approached the Tribunal seeking dispensation of pre-deposit of the penalty amount. The Tribunal's order did not consider the question of hardship, even though it was raised by the petitioner. The High Court emphasized that it is the mandatory duty of the Tribunal to assess undue hardship in such cases. Reference was made to Section 35F of the Central Excise Act, which allows for dispensation of deposit in cases of undue hardship. The Court noted that the Tribunal failed to determine if the deposit would cause undue hardship, instead focusing on the petitioner's past conduct, which is irrelevant in this context. The Court reviewed the arguments and materials presented by the petitioner, highlighting the claim that failure to dispense with the pre-deposit would result in undue hardship. As the Tribunal did not address this issue, the High Court set aside the Tribunal's order and remanded the matter for fresh consideration. The Court directed the Tribunal to reevaluate the question of hardship based on the evidence presented, within a specified timeframe. It was emphasized that the Tribunal should not be influenced by its previous findings, as they were overturned. Ultimately, the writ petition was allowed, and no costs were imposed. Any related miscellaneous petitions were directed to be closed. The judgment underscores the importance of considering undue hardship and following the statutory provisions when deciding on the dispensation of pre-deposit of duty or penalty amounts in appeals under the Central Excise Act.
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