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TMI Blog2014 (2) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... giving certain reasons, suggestive of lack of bona fides, confirmed the demand. In case the appellant invokes the proviso to Section 35F to dispense with the requirement regarding pre-deposit, necessarily, the essential conditions should be satisfied. The Appellate Authority is expected to consider the relevant materials for the purpose of dispensation of pre-deposit. The Tribunal must consider the prima facie case, balance of convenience and undue hardship. Undue hardship cannot be decided without making an attempt to consider the prima facie case. The Tribunal is expected to safeguard the interest of the Revenue also. While considering the applicability of the proviso to Section 35F of the Act in a given case, necessarily, the Tribunal should consider the interest of the Revenue also. In case the available materials are sufficient to arrive at a finding that the assessee has no prima facie case and the pre-deposit would cause undue hardship, necessarily, pre-deposit should be insisted. There is an element of discretion available to the Appellate Tribunal in such matters. The discretion should be exercised in accordance with the settled legal principles. The materials avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 confirming the demand. The Commissioner of Central Excise directed the appellant to pay a sum of Rs. 13,23,85,374/- towards Central Excise Duty for the period in question along with interest and penalty of equal amount under Section 11AC of Central Excise Act. 3. The order in Sl. No. 4/2009, dated 6 May 2009 on the file of the Commissioner, Central Excise, was challenged before the CESTAT. 4. The assessee, along with the statutory appeal, filed an application for waiver of pre-deposit and to stay the operation of the order pending disposal of the appeal. 5. The interlocutory application came up for consideration before the Tribunal. The Vice-President of the Tribunal agreed with the submissions made on behalf of the assessee and opined that the assessee has made out a strong prima facie case for waiver. Accordingly, the Vice-President dispensed with the requirement of pre-deposit and stayed the recovery pending disposal of the appeal. However, the Technical Member was not in agreement with the views expressed by the Vice-President. The Technical Member passed a separate order holding that the assessee has not made out a case for waiver of pre-deposit and that, the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Single Judge, as could be seen from the order and as such, no interference is necessary in the present appeal. According to the learned senior counsel, the assessee has got a very good case on merits and this aspect was not considered by the third member. It was further contended that there has been no shortage of fly ash and as such, the allegation of clandestine removal has no basis. This vital point was not considered by the third member. The writ Court, having appraised of such basic facts arrived at a conclusion that the assessee has established a prima facie case and as such, they should be heard on merits. Therefore, the order requires no interference. Analysis : 11. The assessee is a manufacturer of asbestos sheets. The assessee claimed the benefits of the Exemption Notification No. 6/2002, dated 1 March 2002 during the year 2003-04 and 2004-05. The Commissioner of Central Excise on the basis of materials, arrived at a prima facie satisfaction that the assessee wrongly availed the benefits of the exemption notification. This resulted in issuing a show cause notice dated 7 April 2008 to the assesses proposing to levy an amount of Rs. 15,37,57,177/-towards Excise duty. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed in the notification and therefore, would be entitled to the benefits. However, the second member, and on reference, the third member, disagreed with the said finding. The third member passed a detailed order in support of his conclusion that the balance of convenience was not in favour of the assessee. 17. The third member found that the assessee has created bogus receipts of fly ash from third parties to make out a case for availing duty exemption and therefore, they miserably failed to prove the prima facie case. According to the third member, the assessee railed to prove the essential conditions of exemption notification regarding use of minimum of 25% of fly ash or phospogypsum. The third member in his detailed order indicated several reasons which made him to agree with the views expressed by the Technical Member. It was only in the said circumstances, the assessee was directed to comply with the provision regarding pre-deposit. 18. The question is whether the learned Single Judge was correct in upsetting the factual finding recorded by CESTAT by majority, negativing the plea of prima facie case and undue hardship set up by the assessee. 19. The legality and corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in Benara Valves Ltd. v. Commissioner of Central Excise, (2006) 13 SCC 347 = 2006 (204) E.L.T. 513 (S.C.) = 2008 (12) S.T.R. 104 (S.C.), noticed the unfortunate trend of casually disposing of the stay application without analyzing the factual scenario involved in a particular case. After extracting Section 35F of the Central Excise Act, 1944, the Supreme Court indicated the conditions to be fulfilled by the assessee to invoke the proviso and to avoid pre-deposit. The Supreme Court, held :- 11. Two significant expressions used in the provisions are undue hardship to such person and safeguard the interests of the Revenue . Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interests of the Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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