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TMI Blog1986 (2) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... lief, implying, perhaps, stay upon recovery. 2. Originally, the demand in respect of duty was in a sum of Rs. 1,65,301.61, out of which an amount of Rs. 20,000/- was already deposited. The amount still outstanding is, hence, in a sum of Rs. 1,45,301.69 towards duty only. 3. In the course of the submissions before us, the learned advocate, Shri M.L. Lahoty submitted inter alia that- (a) the applicant had a good case on merits ; (b) the insistence on a deposit of the balance amount of duty and the penalty in full will cause undue hardship to the applicant. 4(a). On a question as to whether we could decide the issue of prior deposit, in terms of Section 35F of the Act at this stage on the existence of a prima facie case, the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit and dispensed with the deposit of the entire amount demanded provided that 25% of the duty demanded is deposited and a bank guarantee was furnished for the balance ; (ii) on a writ petition filed, the High Court held that the Tribunal had not considered the refusa.1 of the Bank and directed the Tribunal to reconsider the application for modifying its earlier order keeping in view the fact that the State Bank of India would not furnish a guarantee unless cash is deposited ; (iii) the Tribunal held that it did not see any reason to modify its earlier order on the ground that although the petitioner had shown losses in the balance-sheet, an amount of Rs. 5,72,000/- shown as sundry debts was not explained and the petitioner had fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts stated, the High Court was of the view that in case an interim order is not granted then the entire business which is on a small scale would come to a stand-still and consequently the High Court thought it to be a fit case where the power under Article 226 could be exercised on the principles laid down by the Supreme Court in the Dunlop case. (c) The question as to whether the existence of a prima facie case is of any relevance whatsoever in a construction of the proviso to Section 35F had been considered by us in quite a few cases and in particular in our decisions reported in- (i) 1985 (20) E.L.T. 384 [Brima Sugar Ltd. v. Collector of Central Excise]; (ii) 1985(21) E.L.T. 558 [Modi Gas and Chemicals Ltd. v. Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial capacity of the applicant in a consideration of undue hardship did not result in the grant of Special Leave to appeal, as it would have, if our construction of the aforesaid expression was wrong. (e) The distinction between grant of a stay of recovery of an amount in dispute in a proceeding, which is otherwise maintainable, and dispensing with a statutory condition requiring a deposit of the disputed amount, as a condition precedent for hearing an appeal, is obvious. In the one case, the proceeding is maintainable, regardless of an interlocutory stay upon recovery, which may be granted in exercise of incidental or ancillary powers. In the other, maintainability of the appeal itself is conditional upon a deposit of the dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause undue hardship. (g) In the premises we are not inclined to hold that we have to look into the existence of a prima facie case in a consideration of undue hardship in terms of S. 35F of the Act. 5. The applicant is admittedly a partnership firm. In the application for dispensing with the deposit it was alleged that the applicant is a small scale unit and it would be extremely difficult to raise the balance amount of duty and penalty demanded, and if required to deposit the same, the applicant will have to close down the establishment. The applicant is, however, prepared to furnish a bank guarantee for the amount still remaining due. In support of his plea that the deposit of the amount of duty still due and the penalty would c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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