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TMI Blog2006 (8) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... dition precedent for exercise of the power to dispense with pre-deposit either fully or in part. Section 35F of the Central Excise Act, 1944 provides that, where in any appeal under Chapter VIA of the said Act, the order appealed against relates to any duty demanded in respect of goods which are not under the control of the Central Excise authorities or any penalty levied under the said Act, the person desirous to appealing against such order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. An order directing the pre-deposit or an order waiving pre-deposit may not involve any question of law, far less a substantial question of law and hence may not be appealable. In any case, such an order cannot be said to be an order in the appeal but is an order incidental to the hearing of the appeal. An order directing deposit of disputed duty or penalty either in full or in part is not ordinarily appealable. It cannot, therefore, be said that the petitioner has an adequate efficacious alternative remedy. The order impugned is, therefore, set aside. The Tribunal shall consider the question of waiver of pre-deposit afresh in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 was issued alleging that CENVAT credit would not be available to the petitioner and calling upon the petitioner to show-cause why an amount of ₹ 3,14,599/- taken as CENVAT credit on 425.740 MTs. of input materials lying in stock with the assessee on 1st April, 2000 and an amount of ₹ 3,10,188/- taken as deemed credit in alleged contravention of notification No. 29/2000-CE(NT) dated 31st March, 2000 on 209.636 MT of inputs should not be disallowed and an equivalent amount recovered along with interest in terms of Rule 57H of the Central Excise Rule, 1944 read with Section 11A(1) and 11AA of the Central Excise Act, 1944. 9. The Joint Commissioner of Central Excise, Haldia Commissionerate, Kolkata passed an Order No. 52/Jt. Commr./CF/Haldia/Adjn/2005 dated 7th March, 2005, the operative portion whereof is extracted hereinbelow: Order: In view of the above: (i) I disallow the credit of ₹ 3,14,597.02/- on the inputs lying in stock as on 31.03.2000 as the assessee have failed to produce duty paying documents, (ii) I disallow the credit of ₹ 3,10,188/- against a quantity of 209.636 MT of Steel Ingot manufactured captively consumed captively by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and consumed captively, in terms of Notification No. 29/2000 C.E.(N.T.) dated 31.3.2000. The said Notification, as it appears, envisages procurement of inputs by way of purchase from outside parties. EXPLANATION contained or appended to the said notification (notification No. 29/2000 CE (NT) dated 31.3.2000) furthermore reinforces the above view, that the input is required to be procured from outside parties the payment of which is paid either by Bank draft or by a cheque drawn on the assessees account. The said assessee have instead procured their inputs captively and consumed captively. The said assessee is therefore asked to show cause to the Assistant Commissioner of Central Excise, Howrah, West Division, 4th Floor, 25, Princep Street, Calcutta - 700072, within 30 (thirty days) of receipt of this notice as to why: (a) ... (b) an amount of ₹ 3,10,188.48 taken as Deemed Credit, in contravention of Notification No. 29/2000 CE (NT) dated 31.3.2000, on 209.636 MT of inputs as aforementioned: shall not be disallowed and an equivalent amount recovered from them along with interest in terms of Rule 57AH of Central Excise Rules, 1944 read with Section 11A(1) 11A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner company in the charge sheet. 21. The attention of the Tribunal was drawn to its earlier decision in the case of Commissioner of Central Excise, Ludhiana v. Nav Bharat Engineering , in support of the contention that the Appellate Authority could not have travelled beyond the charge in the charge sheet. Written submissions were filed before the CESTAT. 22. The CESTAT by the order impugned directed the petitioner company to make a pre-deposit of ₹ 1,50,000/- within a period of eight weeks observing that the duty involved was ₹ 3,10,188/- and the petitioner had not been able to make out a prima facie case. The CESTAT directed that on payment of ₹ 1,50,000/- within the time stipulated in the order, pre-disposit of rest of the duty would stand dispensed with. 23. Ms. Sanjukta Bose appearing on behalf of the petitioner company submitted that in directing pre-deposit of ₹ 1,50,000/- the Tribunal had, in fact, not considered the prima facie case of the petitioner at all. 24. It is now well-settled that in considering the question of waiver of pre-deposit, the Tribunal is bound to consider the prima facie merits of the case. Prima facie case do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submissions made on behalf of the petitioner nor given its findings thereon. Furthermore, the impugned order does not disclose why the petitioner was required to deposit only ₹ 1,50,000/- as against demand of over ₹ 3,00,000/-. 32. The impugned order gives rise to the question of why the CESTAT waived duty of over ₹ 1,50,000/- subject to payment of ₹ 1,50,000/-. There is no finding of financial hardship and/or incapacity. 33. The Appellate Tribunal might waive pre-deposit of disputed duty and/or penalty in part either if it is satisfied that deposit of the entire duty or penalty would cause financial hardship or alternatively if the Tribunal is of the prima facie view that the disputed duty and/or penalty might only be partly sustainable. 34. The Tribunal cannot exercise its power to waive pre-deposit of the duty disputed, even in part, in the absence of reasons. The power of dispensation cannot be exercised arbitrarily or whimsically or for the asking. Satisfaction that pre-deposit of the duty demanded could cause undue hardship is the condition precedent for exercise of the power to dispense with pre-deposit either fully or in part. 35. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scelaneous application directed towards rectifying a mistake apparent from the record. If the order under Section 254(2) had taken the shape of modifying by way of amendment or rectification, the original order to some extent, then both of those jointly might have been appealable under Section 260A; but an order of recall is clearly not appealable. Alternatively, even if appealable, the impugned order being also without jurisdiction, the writ application should be entertained in this case, as an exception, in the interest of expedition of the assessment proceedings. 41. In this case of Ruby Industries v. Commissioner of Central Excise, Calcutta II (Cal) also cited by Ms. Basu, Samaresh Banerjea, J. held as follows: ...I am unable to accept the contention of the respondents that the writ petition is not maintainable, as an appeal lies under Section 35L, of the Act against an order passed by the Tribunal disposing of the application for stay and pre-deposit. Section 35L(b) clearly provides that any order having a relation to the rate of duty of excise or to the rate of duty of excise or to the value of goods for purposes of assessment will be appealable to the Supreme Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution of India where the remedy, if any, of appeal is uncertain as in the case appeals under Section 35G of the Central Excise Act, 1944 which depend on subjective satisfaction of the Division Bench of the High Court of existence of a substantial question of law. 47. In any case, there are, at lease three exceptions to the rule of alternative remedy. A writ application might be entertained where the order is in violation of principles of natural justice, where the order is passed by an authority that has no jurisdiction to pass the order and where the order is passed under a provision of law which is ultra vires. An order which is perverse would also be subject to judicial review of this Court in proceedings under Article 226 of the Constitution of India. In the instant case, the order impugned is apparently non-speaking and, therefore, in violation of principles of natural justice. Furthermore, the decision is not based on any evidence or materials in so far as the same relates to waiver of over 50% of the disputed dues and is perverse in law to that extent. 48. The order impugned is, therefore, set aside. The Tribunal shall consider the question of waiver of pre-dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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