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TMI Blog1987 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at on the assumption that the petitioner had cleared tread rubber of higher quality and had declared lower value before the department; (iii) that this allegation was based on the report of the Chemical Analyst which was relied upon by the Collector without furnishing a copy of the same to the petitioner; and, (iv) that the order of the Collector was entirely based on certain hypothetical calculations and solely based on one sale-bill, and, hence, the entire demand was disputed in the appeal on several grounds. 3. Besides the grounds enumerated in the application under Section 35F of the Act, the grounds urged in the Memorandum of appeal, in detail, were also pressed to be taken into consideration while considering the application under Section 35F of the Act. 4. The liquidity position of the petitioner and the inability to furnish bank-guarantee for the huge sum of more than 30 lakhs, was also advanced before the Tribunal. 5. On behalf of the petitioner it was argued by Sri K.N. Balagopalan that this Court should interfere with the order of the Tribunal for the following reasons:- (i) that the computation of the differential duty is arbitrary and capricious and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the application of its mind, both as regards the prima facie case and the plea of violation of principles of natural justice by the Collector, and as to its liquidity position. 11. Normally, it is not the function of this Court to interfere with the discretionary order of the Appellate Tribunal made in exercise of its power under the proviso to Section 35F of the Act. But, I am impelled to interfere in this case having regard to the facts and circumstances of the case and for the reasons to be stated hereinafter. 12. Several decisions have been cited by the learned Counsel for the petitioner in support of his contentions about the retracted statements and reliance on them for purposes of determining the liability under the Act. (See : AIR 1964 S.C. 1184). 13. So far as the failure to furnish the Chemical Examiner's report to the petitioner and denial of his right to cross-examine the expert, it is submitted, has resulted in grave injustice and that therefore the entire order of the Collector demanding the duty on the basis of the said report, should have been considered by the Tribunal for purpose of stay and reliance is placed on the decisions reported in : (i) (AIR 1968 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayer for dispensing with the pre-deposit of duty in dispute, either the whole or in part, on wholly untenable grounds. 17. It is with the object of obviating such consequences, several High Courts have interfered with such orders and laid down guidelines for a proper approach by the Tribunal. 18. If, on the facts of a given case, rules of natural justice are grossly violated or certain evidence is relied upon to the detriment of the assessee without making it available to the person concerned, and the like, it would be the duty of the Tribunal, to consider such factors which constitute a prima facie case, even at the stage of considering the application for stay pending a detailed consideration at the hearing and also to take into consideration the appellant's chances to success or whether it would be a case for remand. 19. In this connection, the observations of the Calcutta High Court by Justice Sri M.N. Roy made in Rungta Sons (P) Ltd. v. Collector of Customs - [1986 (23) E.L.T. 14, should support the petitioner's case. 20. His Lordship was dealing with Section 129-E of the Customs Act, 1878, corresponding to Section 35F of the Central Excises and Salt Act, 1944, in si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders preventing collection of public revenue for no better reason than that the parties have come to the Court alleging prejudice, inconvenience or harm and that a prima facie case has been shown. There can be and there are no hard and fast rules. But prudence, discretion and circumspection are called for. There are several other vital considerations apart from the existence of a prima facie case. There is the question of balance of convenience. There is the question of irreparable injury. There is the question of public interest. There are many such factors worthy of consideration." 24. The Tribunal's order in this case also suffers from further infirmity, namely, the application made under Section 35F of the Act is disposed of in a summary manner, in that, it is also not a speaking order. The statutory discretion which vests with the Tribunal is coupled with the duty to consider all aspects of the case and to pass an order considering each one of the grounds urged for dispensing with the pre-deposit. 25. On the facts of the present case the total amount of duty and penalty exceeded Rs. Thirty lakhs and the Tribunal's direction to deposit Rs. Twenty lakhs representing the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llector's order. 29. The Note annexed to the Abstract gives credence to and supports the case of the petitioner that the differential duty is calculated on two hypothetical grounds, viz., (i) the report of the Chemical Analyst as to the higher grade tread rubber supplied and the conclusion of under-valuation by Collector on this premise; (ii) a flat rate of Rs. 23.50ps. per kg., is adopted in respect of all supplies made and the differential value is adopted and the differential duty calculated on that basis. That such a computation was made even before final reports of investigation were received by the Collector, the proceeded on the assumption that the value of all supplies made should be graded at a higher rate of Rs. 23.50 per kg., cannot be disputed. 30. The case of the Department so far as the levy of duty as per Annexures 'D', 'F' and 'H', which refers to flow-back in the guise of supply of vulcanising solution and other items totaling to a sum of Rs. 7,04,667.88ps. should be left to the Appellate Tribunal to consider in the appeal, on merits and I do not wish to express any opinion on this, and the direction to deposit this sum should stand. 31. I had to expend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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