Full Judgment
Wadco Packaging Pvt. Ltd. and Shri V.K. Phadnis filed appeals and also an application for waiver of pre-deposit of the duty confirmed. The Tribunal vide Order Nos. C-II/315-316/WZB-1999 dated 3.2.1999 issued on 8.2.1999 directed M/s. Wadco Packaging Pvt. Ltd. to deposit a sum of Rs. 25,00,000 towards the duty demanded and ordered waiver of the remainder and stay of recovery thereof on such deposit being made. The appellants complied with the direction and moved an application for early hearing on the ground that they were placed in a worse situation than their competitors who were not required to pay any duty of Central Excise although the goods made by them were identical. The Tribunal in their Order Nos. C-II/2128-2129/99-WZB/1999 dated 18.8.1999 did not accede to this request. Three miscellaneous applications have now been filed. The first (E/Misc (Ore) 904/2000-Mum) is for permission enabling the appellants to deposit the remainder duty with the prayer that the concerned authority be directed to issue a certificate as stipulated in Rule 57-E of the Central Excise Rules, 1944 so that the buyer manufacturers could avail of the credit of the duty paid. Arguments were advanced by both sides on this application. Subsequently application No. E/Misc (Ors) 123/2000-Mum was filed on 21.2.2000 with a prayer for modification of the appeal memorandum in effect forgoing right to press the appeal as regards the demand of duty was concerned.
On 29.2.2000 application No. E/Misc (Modfn.)/125/2000-Mum was filed seeking modification of the order dated 3.2.1999 of the Tribunal referred to above.
2. We have heard both sides on these three applications. The issue that came up for consideration was the nomenclature of the amount deposited by an appellant in pursuance of the directions made by the Tribunal in an order disposing of the application for waiver and stay. Shri K.L.
Ramteke referred to the Supreme Court judgment in the case of Suvidhe Ltd. v. UOI , where such deposit is ruled to be not amounting to payment of duty and thus immune from the provisions of Section 11AB of the Central Excises and Salt Act, 1944. He also referred to Calcutta High Court judgment in the case of Sunny Detgergent Pvt. Ltd. v. CCE . In this judgment dealing with the Kar Vivad Samadhan Scheme the High Court held that the phrase substantive amounts of tax disputed would not apply to pre-deposits pending disposal of appeal. The High Court termed this not as a tax but payment in regard to a proceeding. As against these two judgments we have before us the Supreme Court judgment in the case of Jain Spinners Ltd. . In this judgment in dealing with the doctrine of unjust enrichment, the Court held that the disputed amounts of duty deposited with the Court would invite the application of provisions of Section 11B of the Act.
3. We find that this judgment of the Supreme Court has not been referred in either of the cited judgments of the High Courts.
4. Section 35F of the Act makes it a condition that the appellant deposit the duty demanded and or the penalty levied. The proviso to that section permits the Tribunal in certain circumstances to dispense with such deposit. It appears to us that the proviso has been more prominently projected than the section. When the section is read alongwith the proviso it would appear that the deposit actually represents "the duty demanded or penalty levied", and does not make it a separate identity of a deposit as in the normal commercial parlance.
5. In the present case even this seeming controversy is not relevant inasmuch as the appellants are eager to deposit the entire duty confirmed and have forgone their right to dispute this in the present proceedings. Paragraph 2 of the application No. E/Misc. (Ors) 123/2000-Mum reads as under: 2. The applicants hereby state and affirm that they will not press the appeal in so far as the above demand of duty for which the certificate under Rule 57E is sought for in the aforesaid miscellaneous application. Thus, appellants will not and cannot claim refund of the amount of duty for which certificate under Rule 57E is issued by respondent. Therefore, the applicants will press and contest balance appeal inter alia relating to issue of classification, liability to penalty, interest, if any, availability of Modvat on inputs used by appellant etc.
6. In identical circumstances in a number of decisions the Tribunal had directed that on duty paying deposit the jurisdictional officers would issue a certificate as prescribed in Rule 57E.7. We accept these applications and direct the applicant to deposit the remainder of the duty. The revenue is directed to issue necessary certificate under Rule 57E of the Rules.