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TMI Blog1996 (6) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that it was entitled to exemption thereon as per the Notification No. 188/86, dated 3-3-1986. 3.It appears that the exemption under the said notification was available on the inner tubes of rubber for tyres of a kind used on animal drawn vehicles or hand carts, provided that a durable prominent marking of the letters `ADV' had been made on every such tube. 4.It further appears that the excise authorities, on investigation having found that the petitioner had indulged in removing inner tubes without the marking the letters "ADV", subjected it to duty and penalty as noticed above. Against the said order of adjudication, the petitioner preferred an appeal before the Tribunal along with an application for dispensing with the pre-deposit in terms of the proviso to Section 35F of the Act. The Tribunal whereupon passed the impugned orders at Annexure `F' and `H' referred to above. 5.The contention raised by Sri Chander Kumar, learned Counsel appearing for the petitioner is that the Tribunal has failed to exercise its jurisdiction under the proviso to Section 35F without properly appreciating the ambit of the expression "Undue hardship" as appearing therein and by not applyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 679 (S.C.) = AIR 1971 SC 2280 and Vijayaprakash D. Mehta Jawahar D. Mehta v. Collector of Customs - 1989 (39) E.L.T. 178 (S.C.) = AIR 1988 SC 2010. 9.Section 129(1) of the Customs Act as it stood at the material time, reads thus : - "Section 129(1) where the decision or order appealed against related to any duty demanded in respect of goods which are not under the control of customs authorities or any penalty levied under this Act, any person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied : Provided that where in any particular case the Appellate Authority is of opinion that the deposit of duty demanded or penalty levied will cause undue hardship to the appellant, it may in its discretion dispense with such deposit, either unconditionally or subject to such conditions as it may deem fit." 10Section 129E of the Customs Act as incorporated. by Finance Act, 1980, reads thus : "Section 129-E. Deposit, pending appeal, of duty demanded or penalty levied :- Where in any appeal under this Chapter, the decision or order appealed against relates to any (duty and interest) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully competent to reject the same. It has further been held in this case that (Para 11) - "Here we are concerned with the right given under Section 129A of the Act as controlled by Section 129E of the Act, and that right is with a condition and thus a conditional right. The petitioner in this case has no absolute right of stay. He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitations of Section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardships". That discretion must be exercised on relevant materials, honestly, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority. In this case it is manifest that the order of the Tribunal was passed honestly, bona fide and having regard to the plea of undue hardship as convassed by the appellant. There was no error of jurisdiction or misdirection." 13.Therefore, it has to be held that if the person preferring appeal under Section 35 or 35B of the Act fails to deposit the duty and/or penalty as provided und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has referred to various judicial pronouncements in this regard. Now I proceed to deal with the said precedents. 17.In the case of New Vinod Silk Mills Pvt. Ltd. v. Union of India - 1994 (71) E.L.T. 910 Bombay and Indian Jute Industries Ltd. v. Collector of Central Excise - 1992 (62) E.L.T. 290 Calcutta, the companies had been declared to be `Sick Industrial Companies' by the Board of Industrial Financial Reconstruction (in short BIFR) under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short `Sick Industries Act') and as such these Companies were entitled to protection under Section 22 of the said Act. Despite the said facts, since the Appellate Authorities had failed to give due consideration to the said aspect, the Calcutta and Bombay High Courts in the cases before them found it essential to interfere with the orders of the Appellate Authorities. 18.In the present case, admittedly the petitioner has not been declared to be sick by the BIFR under the Sick Industries Act, so as to enable it to avail the protection of Section 22 of the said Act. Though Mr. Chander Kumar, in order to seek support from the above referred cases of Calcutta a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal had admittedly recorded the finding on the aspect of the "undue hardship". Therefore this case as well is no avail to the petitioner. 22.Next case cited is of Collector of Central Excise v. Coronation Litho Works - 1994 (69) E.L.T. 238. In this case a Bench of Madras High Court on appraisal of balance sheet of the company by itself had came to the conclusion that keeping in view the profits earned by the company a direction to deposit a sum of Rs. 13 lakhs would be more appropriate. This case is more on facts and does not have much value as a precedent, since a decision can be used as a precedent only on a question of law and not on that of fact. 23.In the case of V. Marutha Muthu v. Cegat - 1992 (60) E.L.T. 208, it was held that "In my view, the Tribunal having taken note of the fact that both the petitioners are not financially sound, ought not to have directed them to deposit Rs. 1,00,000/- towards duty on or before 31-1-1992. It is true that the entire penalty has been dispensed with. But I am not satisfied that the Tribunal has exercised its discretion properly in this case by asking the petitioners to pre-deposit a sum of Rs. 1,00,000/- considering the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he non-compliance thereof may result in dismissal of the appeal. Secondly, if no order is passed under Section 35F, then in such a situation the Excise Authorities will be competent to proceed with recovery proceedings of the disputed amounts in accordance with the statutory proceedings in this regard. But if an order is passed by the Appellate Authority dispensing with the requirement of the pre-deposit either in part or whole, then as per the instructions of the Board, the Excise authorities are restrained from going ahead with recovery proceedings since the Board has directed to treat such orders as stay orders in respect of disputed demands. I am further of the view that appeals are taken only against disputed dues and therefore an order of dispensation can be passed under the said proviso only in respect of disputed dues and not the admitted dues. 26.Now coming to the facts of the present case, in the first impugned order dated 1-6-1994 (Annexure-F) the Tribunal had partially dispensed with the requirement of the pre-deposit, by considering all the material facts placed before it. The finding is recorded in Paragraph 3 of the said order is to the following effect : "3. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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