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TMI Blog2012 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeal by Tribunal. - Writ Petition No.2094 of 2012 - - - Dated:- 14-2-2012 - MR.JUSTICE M.JAICHANDREN, J. For petitioner : Mr.N.Venkatraman senior counsel for Mr.Mohammed Shaffiq For respondents : Mr.V.Sundareswaran CGSC O R D E R This writ petition has been filed praying that this Court may be pleased to issue a writ of Certiorarified Mandamus to call for the records relating to the stay order No.813/2011, dated 8.12.2011, on the file of the Customs, Excise and Service Tax Appellate Tribunal, (South Zonal Bench), Chennai, the first respondent herein, and quash the same and consequently, direct the first respondent to hear the appeal filed by the petitioner, in Appeal No.E/423 422/09, without insisting on the petitioner making the pre-deposit and to pass appropriate orders, on merits and in accordance with law. 2. It has been stated that the petitioner is a holder of Central Excise Registration No.AAACV7263KXM003. The petitioner is a manufacturer of Asbestos Cement Sheets, classifiable under the sub-heading 6811 of the Central Excise Tariff Act, 1985, using raw materials, like, cement, fly ash, cotton, wood pulp, etc. 3. It has been further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Contractors had no significance. The documents relied on by the department cannot be taken as dependable evidence, as they are third party documents and therefore, they cannot be the basis for demanding the duty. The entire quantity of fly ash purchased by the petitioner had been recorded in the books of accounts and paid for by the company. Further, in the SCN there is no proposal to deny the exemption contained in the notification No.6/2002-CE, dated 1.3.2002, by the proper officer of the department. Without denying the exemption contained in the said notification, the demand made in SCN is premature and liable to be withdrawn. 7. It has been further stated that on submission of the reply to the show cause notice issued to the petitioner, the second respondent had adjudicated the matter, after giving an opportunity of personal hearing to the petitioner, on the basis of the findings given in paragraphs 22 to 29 of the Order-in-Original No.4/2009, dated 6.5.2009. The demand order confirmed an amount of Rs.13,23,85,374/- towards the Central Excise duty for the periods in question, along with the interest and penalty of an equal amount, under section 11 AC of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the notification stating that the manufacturer should ensure that its suppliers should maintain proper accounts. Notification No.6/2002-CE, dated 1.3.2002, in Sl.No.158, exempts goods falling under chapter No.68, in which not less than 25%, by weight of fly ash or phosphor-gypsum or both, have been used. Further, there is no prohibition for re-sale of fly ash, as there is no such condition prescribed in the notification. As such, it is clear that the second member had traversed beyond the conditions stipulated in the notification in directing the petitioner to make the pre-deposit. Similarly, the findings of the third member are also contrary to the well established position of law. 11. It has been further stated that once it is found that the end product contains 25% or more of fly ash, it would not be open to the authorities concerned to hold that the petitioner had violated the conditions prescribed in the notification. It is not open to them to investigate and to penalise the petitioner for non-maintenance of the accounts, by the suppliers of fly ash, even though it may be open to them to initiate appropriate action against such suppliers. As long as the conditions stip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispose of any of its assets except in the usual course of business or with the leave of the Court. This undertaking is still subsisting. The Collector did not reject this safeguard as inadequate. The demand relates to a period for the clearance had already been made. There is no question of the petitioner recovering the amount from its customers." 13.2. In GREAVES COTTON AND CO. LTD. Vs. SALES TAX OFFICER AND ANR. (1987) 67 STC 364 (ORISSA), the High Court of Orissa had held as follows: "Keeping in view the stand of the petitioner which has been to a great extent accepted by the Commissioner, this would be a most deserving and appropriate case for grant of full stay, and in view of the difference of opinion between the two learned Judges, in my opinion, the view which is beneficial to the assessee should be accepted. I would, therefore, agree with the conclusion of Honourable Justice R. C. Patnaik and hold that the order of the Commissioner be modified and the entire amount under demand be stayed till the final disposal of the appeal by the Assistant Commissioner. The Assistant Commissioner is directed to dispose of the pending appeal before him within two months from toda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens' faith in the impartiality of public administration, interim relief can be given." 14. In the counter affidavit filed on behalf of the second respondent, it has been stated that the writ petition is not maintainable, in view of the fact that the impugned order is a discretionary order passed by the first respondent, under section 35F of the Central Excise and Salt Act, 1944. The said order had been passed, by the first respondent, taking into consideration the relevant records, including the written submissions filed on behalf of the petitioner, and in view of the facts and circumstances of the case, and keeping in view the various decisions of the courts of law. 15. It had been stated that the Government of India had granted exemption from the payment of excise duty, in case of goods falling under e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ash had been purchased from other sources. In such circumstances, a notice had been issued to the petitioner to show cause as to why the claim of exemption relating to the bogus purchase of fly ash relating, to the years 2003-04 and 2004-05, should not be disallowed. The proceedings had been initiated, within the time frame prescribed under the proviso to Section 11A of the Act. 19. It had been further stated that, after objections had been filed by the petitioner, and after affording adequate opportunity of hearing to the petitioner, the Order-in-Original, dated 6.5.2009, had been passed, considering all the aspects raised by the petitioner. 20. Aggrieved by the said order, the petitioner had preferred an appeal before the first respondent, in Appeal No.E/423 422/09. Along with the said appeal, the petitioner had also preferred an application to stay the Order-in -Original. The first respondent had passed an order, dated 8.12.2011, in stay order No.813 of 2011, by a majority of two members, asking the petitioner to pre-deposit an amount of Rs.4,50,00,000/-, towards duty, within six weeks from the date of pronouncement of the said order. It had also been stated that, subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y High Court (vide citations in para 9), I direct the first appellant M/s.Visaka Industries Ltd., to pre-deposit an amount of Rs.4,50,00,000/- (Rupees Four crores and fifty lakhs only) towards duty and the second appellant M/s.Natesan Engineers Contractors to pre-deposit an amount of Rs.4,00,000/- (Rupees Four lakhs only) towards penalty within six weeks from the date of pronouncement of the stay order. Subject to compliance with the above direction, pre-deposit of the balance amount of duty, interest and penalty shall remain waived during the pendency of the appeals." 23. As there was a difference of opinion between the members of the first respondent Tribunal, the matter had been referred to the third member, who had concluded as follows: "28.3. It is also not disputed that the assessee was allotted a quantity of 2000 metric tones per month by the Mettur Thermal Power Station. The assessee had procured only a quantity of 7285.060 during 2003-04 even though they have paid advance for lifting 9000 metric tones. Consequently, they have claimed refund of excess amount relating to 2251 metric tones. That being the case, the reason for accounting the said quantity as having b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent directing the petitioner to make the pre-deposit of Rs.4,50,00,000/- as a condition, for the grant of the stay order is not maintainable. 26. On considering the various decisions of the courts of law, it is clear that the petitioner has to claim and show the existence of 'undue financial hardship for the grant of waiver of pre-deposit. Since, in the present case, the petitioner had not filed any document claiming undue financial hardship, the waiver of pre-deposit cannot be granted. further, in view of the fact that the petitioner had not made out a strong prima facie case in the appeal filed before the first respondent, the contentions raised by the petitioner, in the present writ petition, cannot be countenanced. As such, the writ petition is devoid of merits and therefore, it is liable to be dismissed. 27. The learned Central Government Standing Counsel appearing on behalf of the second respondent had relied on the following decisions in support of contentions: 27.1. In BENARA VALVES LTD. AND OTHERS Vs. COMMISSIONER OF CENTRAL EXCISE AND ANOTHER (2009) 20 VST 297 (SC), the Supreme Court had held as follows: "8. It is true that on merely establishing a prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.2. In UNION OF INDIA AND ANOTHER Vs. ADANI EXPORTS LTD. AND ANOTHER (2007) 13 SCC 207, the Supreme Court had held as follows: "8. It is not in dispute that the respondents have filed appeals before the Tribunal. As noted by the High Court, primary challenge in the writ petitions was to the order relating to pre-deposit. While dealing with that the High Court was not justified in going into the merits and expressing its views and thereafter remitting the matter to the Tribunal (sic adjudicating authority). Such a course was not available to be adopted." 28. In view of the submissions made by the learned counsels appearing for the petitioner as well as the second respondent, and on a perusal of the records available, and on considering the decisions cited supra, this Court is of the considered view that the first respondent Tribunal ought to have granted the relief of interim stay of the impugned order, without imposing the condition of pre-deposit, as prayed for by the petitioner, in the present writ petition. 29. Even though the first respondent Tribunal had exercised its discretionary power, Section 35F of the Central Excise and Salt Act, 1944, in granting the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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