9911796707
TMI Blog2014 (5) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... . These observation are, however, only prima facie observations which will not influence the adjudication of the pending appeals on merit. Where an assessee has a good prima facie case, and the disputed duty and/or penalty has apparently been charged wrongfully, the requirement of pre-deposit of the disputed tax and/or penalty is liable to be waived, since pre-deposit of tax not payable by an assessee, would in itself cause hardship to that assessee - Where there is a very good prima facie case, pre-deposit would have to be waived altogether. Where the appellant has an arguable case, pre-deposit might be waived on such conditions as would protect the interest of Revenue. In fact, learned Tribunal was conscious of its duty to consider the prima facie case and accordingly recorded a prima facie finding with regard to the merit of the demand, but cursorily without properly applying its mind to the issues involved in the appeal. - Tribunal has cursorily considered the merits of the case. The learned Tribunal has not at all considered the question of limitation, on which, the question of jurisdiction to issue a show-cause notice for realizing a demand, depends. Admittedly, the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of duty and penalty and penalty on the Director would stand waived. 2. The petitioner has also challenged Order No. M-67/Kol/2012, dated 20th February, 2012 passed by the Customs, Excise and Service Tax Appellate Tribunal, Easter Regional Bench, Kolkata, refusing to modify the aforesaid order and directing the petitioner to pre-deposit ₹ 60 Lakhs and report compliance on 28th March, 2012. 3. The short question involved in this appeal is whether the learned Tribunal was justified in directing the petitioner to deposit ₹ 60 Lakhs as a condition for hearing the appeals. 4. The petitioner No. 1 carries on business, inter alia, of manufacture of diverse goods, which are excisable commodities, including re-rolled steel products, non-alloy steel ingots and sponge iron. The petitioner No. 1 has various units in West Bengal. 5. The petitioners claim to sell their finished products to independent buyers and also to their sister concerns on stock transfer basis. According to the petitioners, the petitioners supply manufactured goods to their sister concerns on payment of duty. visited the registered office of the petitioner No. 1 at Kolkata. Thereafter, on the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Diff. Value Duly/E. Cess 2002-2003, 27875.430 MT ingots ₹ 59535189.00 ₹ 85,01,189.00 ₹ 42,457.00 2003-2004 2004-2005 (except 1-4-2004 to 8-7-2004) (B) (II) (a) M/s. SSL (Power Division) : Period Quantity/Commodity Diff. Value Duly/E. Cess 5-8-2003 to 31-3-2005 (except 1-3-2004 to 8-7-2004) 9-7-2004 to 31-3-2005 33854.770 MT Sponge Iron ₹ 1,19,46,659.00 ₹ 17,43,948.00 ₹ 20,720.00 (E. Cess) (b) M/s. SSL (SID-I) : Period Quantity/ Commodity Diff. Value Duly/ E. Cess 1-4-2002 to 31-3-2003 5-8-2003 to 29-2-2004 3348.130 MT Sponge Ingots ₹ 45,37,701.00 ₹ 7,26,032. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts or where there has been contravention of any provision of the Central Excise Act or the Rules made thereunder, with intent to evade payment of duty, a show-cause notice calling upon the person chargeable to duty to pay the duty not paid or short paid, may be issued within five years. A perusal of the show-cause notice issued to the petitioner indicates that the demand for differential duty was in respect of the period from 2002-2003 till 31st March, 2005. The duty necessarily had to be recovered by issuing a show-cause notice within one year. No show-cause notice could have been issued after 1st April, 2006, even in respect of the last consignments specified in the show-cause notice, unless the Revenue was able to make out a case of fraud, collusion, wilful mis-statement or deliberate suppression of facts or contravention of any specific provision of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty. 10. Prima facie there is not a whisper in the show-cause notice of any fraud, collusion, wilful mis-statement, suppression of facts or of contravention of any particular provision of the Central Excise Act, 1944. There is only a sweepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng so, the learned Commissioner acted in flagrant violation of the principles of natural justice. 17. By an Order in original No. 48/COMMR/BOL/9, dated 19th March, 2009 issued on 26th March, 2009, the learned Commissioner again confirmed the demand of ₹ 1,75,55,032/- as raised in the show-cause notice and imposed penalty of ₹ 1,85,09,989/- on the petitioner Nos. l to 5 and penalty of ₹ 10 Lakhs on the petitioner No. 6. 18. Mr. Datta submitted that the order having been passed by placing reliance on reports obtained behind the back, of the petitioners, without giving copies of the reports to the petitioners, and without giving the petitioners opportunity to make submissions on such reports, the same was in violation of principles of natural justice. Against the aforesaid order the petitioners filed appeals being Excise Appeal Nos. 390-395/2009 in the Customs Excise and Service Tax Appellate Tribunal. East Regional Bench, Kolkata and also filed applications for dispensation of pre-deposit of the disputed duty and penalty, which have given rise to the order impugned in this writ petition. 19. Section 35F of the Central Excise Act, 1944 provides as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the prima facie merits of the case. Prima facie case does not mean gilt edged case as held by this Court in Ruby Rubber Industries v. Commissioner of Central Excise, Calcutta-II reported in 1998 (104) E.L.T. 330 (Cal). The Appellate Authority is to examine, whether the case made out by the appellant is an arguable one. 23. Where an assessee has a good prima facie case, and the disputed duty and/or penalty has apparently been charged wrongfully, the requirement of pre-deposit of the disputed tax and/or penalty is liable to be waived, since pre-deposit of tax not payable by an assessee, would in itself cause hardship to that assessee, as held by this Court in Bongaigaon Refinery Petrochem Ltd. v. Collector of Central Excise (A), Cal. reported in 1994 (69) E.L.T. 193 (Cal). 24. The judgments of this Court in Ruby Rubber Industries (supra) and Bongaigaon Refinery Petrochem Ltd. (supra) were followed by this Bench in M/s. Tijiya Steel Pvt. Ltd. Anr. v. Union of India Ors. reported in (2007) 2 Cal LT 358 (HC). 25. In M/s. Tijiya Steel Pvt. Ltd. (supra) this Court has observed that in considering the question of waiver of pre-deposit, two factors are of paramount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act, been conferred with discretion to waive pre-deposit in a case where pre-deposit would cause undue hardship to the appellant. As held by a Division Bench of this Court presided over by P.D. Desai. C.J. in J.N. Chemical (Pvt.) Ltd. v. CEGAT reported in 1991 (53) E.L.T. 543 (Cal) where enabling or discretionary power is conferred on a public authority, the words which are permissive in character may be construed as involving a duty to exercise the power. Thus, where the facts and circumstances of the case warrant dispensation of pre-deposit, pre-deposit must be dispensed with. 31. In J.N. Chemical (Pvt.) Ltd. (supra) the Division Bench found that the appellant was covered by another decision of the Tribunal. The Division Bench, therefore, examined the findings with regard to prima facie case and observed that it was impossible for the Tribunal to arrive at the conclusion that it could not be said that the appellant had a good prima facie case. 32. In I.T.C. Ltd. v. Commissioner (Appeals), Customs Central Excise, reported in 2005 (184) E.L.T. 347 (All.) a Division Bench of Allahabad High Court held that while the Court should not grant stay of recovery for the askin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant 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 Karnataka and Ors. MANU/SC/0199/1994 : [1993] 2 SCR 715 that under Indian conditions expression Undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be undue it must be shown that the particular burden to have to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The other aspect relates to imposition of condition to safeguard the interest of revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 577 (S.C.) the Supreme Court held that the extended period of limitation is not invocable unless there is some positive act other than mere inaction or failure on the part of the manufacturer. There must be conscious or deliberate withholding of information by the assessee to invoke the larger period of limitation. In the instant case, there is not a whisper of the information that was deliberately withheld by the petitioner to avoid its liability to pay service tax. 40. In Aban Loyd Chiles Offshore Limited v. Commissioner of Customs, Maharashtra reported in 2006 (200) E.L.T. 370 (S.C.), the Supreme Court held that when facts were within the knowledge of the department, invocation of extended period of limitation was not sustainable. In the instant case, prima facie, the clearances were well within the knowledge of the Revenue, and duty was paid thereon. 41. In Indu Nissan Oxo Chemicals Industries Limited v. Union of India and Ors. reported in 2007 (13) SCC 487, the Supreme Court held :- 12. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 (218) E.L.T. 164 cited by Mr. Maity appearing for the respondents. 46. The condition precedent for exercise of power to waive pre-deposit is prima facie satisfaction of the Appellate Authority that pre-deposit would result in undue hardship to the appellant. The Appellate Authority cannot whimsically and arbitrarily waive pre-deposit or even part thereof. Pre-deposit can be waived in part either on satisfaction that payment of the amount that is waived would cause financial hardship to the appellant, but the appellant is, in the financial position to make payment of the rest of the duty and penalty without undue hardship, or alternatively when the Appellate Authority is prima facie satisfied that the appellant has been able to make out a strong prima facie case for setting aside of a part of the duty levied and/or penalty imposed corresponding to the amount, of which pre-deposit is waived. In the instant case, the impugned order does not disclose the reason for directing pre-deposit of ₹ 60 lakhs only and waiving deposit of the balance duty and penalty. 47. The impugned orders cannot be sustained and the same are set aside and quashed. The Commissioner shall consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
