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TMI Blog2011 (6) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... endra B. Mishra for the Respondent. JUDGMENT Dr. D.Y. Chandrachud, J. - This appeal is directed against an order of the Customs, Excise and Service Tax Appellate Tribunal on an application for waiver of the condition of pre-deposit under section 35F of the Central Excise Act, 1944. Though six questions of law have been raised, Counsel appearing on behalf of the Appellant has confined the appeal to the following two, namely : (i) Whether, prima facie when a Public Sector Undertaking is of substantial worth and solvency and able to secure the Revenue by a general bond (in consonance with the binding Central Excise Manual requirements as well as judgments of this Hon'ble Court) can the Tribunal sit in judgment and order a pre-deposit of almost 50 per cent; and (ii) Whether in facts and circumstances of the case and in law, Respondent No. 2, the Tribunal, is justified in not considering the prima facie case made out by the Appellant on the basis of a chart as well as the annexure to the Show Cause Notice wherein the Department has admitted that Naphtha procured under an exemption notification was in short supply and the gap of steam is bridged by using steam generated out of na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an appeal before the Tribunal together with an application for waiver of pre-deposit. The Tribunal by its order, which is impugned in these proceedings, directed the Appellant to deposit an amount of Rs. 2 crores and report compliance by 19-8-2011. 5. On behalf of the Appellant two submissions have been urged. Firstly, it has been submitted that the Appellant was entitled to a complete waiver of the requirement of pre-deposit for the reason that it is a Central Government Undertaking. Secondly, it has been urged that the order of the Tribunal would indicate that the appeal before the Tribunal involves a serious question for consideration including as to whether the Appellant has duly fulfilled the conditions prescribed by the exemption notification. Counsel submitted that Tribunal launched upon a detailed enquiry into the merits of the case in the manner that it was disposing of an appeal finally. At the stage of consideration of the application for a waiver of pre-deposit, the Tribunal was only required to consider as to whether a prima facie case was made out, which requires a serious evaluation at the final hearing of the appeal. 6. On the other hand, Counsel appearing on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is owned by the Central Government, the company still retains a juristic character and cannot be equated with the Union of India. Where a Government company is engaged in activities in the priority sector that, as the Supreme Court held, is an important consideration in determining whether an order of deposit will adversely affect the public interest. Similarly, the fact that a Government company carries on activities which have an important element of public interest, such as the implementation of the Directive Principles of State Policy is a relevant factor. But in an era of deregulation, an enterprise which carries on commercial activities cannot be exempt from a requirement of pre-deposit only on the ground that a part of its share capital is owned by Government. The requirement of pre-deposit has been enacted to ensure that litigants do not by protracting litigation, delay the realisation of the revenue dues of Government. The need to safeguard the interests of the revenue is integral to legislation requiring pre-deposit. That need has to be carefully balanced with the concerns of justice to the appellant in each case. Hence, the discretion of the Tribunal cannot be placed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Central Board of Excise and Customs, which according to the Court, should have been considered by the Tribunal; (ii) That the Petitioner was a Government of India Undertaking whose solvency was beyond doubt; and (iii) The fact that the question, which was sought to be raised in the appeal, required serious consideration by the Tribunal. It is upon evaluating the totality of all these circumstances that the Division Bench came to the conclusion that the Petitioner should be directed to execute a general bond with the Jurisdictional Assistant Commissioner/Deputy Commissioner. The provisions of the Manual were only one circumstance which the Bench observed that the Tribunal should have considered. A Special Leave Petition against the judgment of this Court was dismissed by the Supreme Court on 5-4-2010 (Union of India v. Hindustan Petroleum Corporation Ltd. [2010] (257) ELT A22 (SC). In a subsequent order of the Division Bench dated 16-9-2009 in Bharat Petroleum Corpn. Ltd. v. Union of Indian Writ Petition 7478 of 2009 the earlier decision in Hindustan Petroleum Corpn. Ltd. (supra) was followed. Another Division Bench followed the first decision in Hindustan Petroleum C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btedly, where the Appellant is a Government Company which is in sound financial position that would be a material consideration which has a bearing on the safeguarding of the interests of the Revenue. Similarly, the fact that the Company in question, is a Government Company which engages in an important public project, having a bearing on the public interest, would be a relevant consideration. The question as to whether the appeal raises an issue which requires serious consideration is again a matter which has to be judiciously evaluated by the Tribunal prima facie at the stage when an application for dispensation of pre-deposit is made. 10. In the present case, the Appellant has contended that it is entitled to the benefit of the exemption notification on the ground that the Naphtha that is acquired is for the intended use of manufacture of fertilizers. In this regard, in order to support its case, the Appellant placed reliance on a judgment of the Supreme Court in State of Haryana v. Dalmia Dadri Cement Ltd. 2004 (178) ELT 13 and more particularly on the following observations contained in paragraph 13 of the judgment : "We are, therefore, of the view that the real question whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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