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TMI Blog2014 (4) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... able, and how much is not. The impugned order is set aside. The Tribunal shall consider the question of waiver of pre-deposit a fresh in accordance with law - Matter remanded back. - W.P. No. 19905 (W) of 2012 - - - Dated:- 30-4-2014 - Indira Banerjee, J. Dr. Samir Chakraborty and Shri Abhijit Biswas, Advocates, for the Petitioner. Shri K.K. Maity, for the Respondent. JUDGMENT The petitioner carries on business of manufacture and sale of iron and steel products. The petitioner has factories in Durgapur in West Bengal and in the State of Orissa. The petitioner set up 3 plants within one factory premises namely a mini, blast furnace, steel melting shop and sinter plant. 2. Raw materials such as mild steel angles, mild steel channels, mild steel beam, mild steel joints, mild steel plate, sheets and pipes required for fabricating various components and parts were procured by the petitioner from time to time. 3. Out of the total quantity of approximately 42,300 MT of various iron and steel materials for example angles, channels, beams, pipes, etc., purchased and procured, the petitioner consumed 37,970 MT of structural steel but availed credit of Excise d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue based on appreciation of evidence as produced by both sides. 10. The Tribunal also summarily rejected the petitioner s contention as regards financial hardship on the purported ground that the petitioner was unable to substantiate the same. The learned Tribunal directed the petitioner to pre-deposit 25% of the duty demand pertaining to the normal period that is, ₹ 6.2 crores within 8 weeks and to report compliance thereof. 11. 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 does not mean a gilt edged case as held by this Court in Ruby Rubber Industries v. Commissioner of Central Excise, Calcutta reported in 1998 (104) E.L.T. 330 (Cal.). The Tribunal is to examine whether the case made out by the appellant is an arguable one. 12. Where an assessee has a good prima facie case and the disputed duty or penalty has apparently been charged wrongfully, the requirement of pre-deposit of the disputed tax 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally 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. 19. The appellate authority has, under Section 35F of the Central 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. 20. In J.N. Chemical (Pvt.) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in such matters though discretion is available, the same has to be exercised judicially. 7. The applicable principles have been set out succinctly in Siliguri Municipality and Ors. v. Amalendu Das and Ors. [AIR 1984 SC 653] and M/s. Samarias Trading Co. Pvt. Ltd. v. S. Samuel and Ors. [AIR 1985 SC 61] and Assistant Collector of Central Excise v. Dunlop India Ltd. [AIR 1985 SC 330]. 8. 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 to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to 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 pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was required to deposit only 25%. 30. The learned Tribunal could have waived pre-deposit of disputed duty or penalty in part if it were satisfied that the deposit of the entire duty or penalty would cause financial hardship but not partial deposit or alternatively if the Tribunal were of the prima facie view that the disputed duty and/or penalty might only be partly sustainable. In the instant case the impugned order does not indicate how much of the disputed duty is prima facie sustainable, and how much is not. 31. The learned Tribunal could not have exercised its power to waive pre-deposit of duty disputed, even in part without explaining the reason for doing so. The power of dispensation cannot be exercised arbitrarily or whimsically or for the asking. Satisfaction that pre-deposit of the duty demanded would cause undue hardship is the condition precedent for exercise of the power to dispense with the deposit either fully or in part. 32. As held by this Court in Tijiya Steel v. Union of India (supra) an order directing 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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