ORDER
D.V. Shylendra Kumar, J.
1. The orders of the Tribunal which is functioning under section 35-B of the Central Excise Act, 1944 (for short 'the Act') and passing orders in exercise of powers under the proviso to Section 35-F of the Act have always been the subject matter of controversy and subject for further litigation to approach the High Court by invoking the provisions of Articles 226 and 227 of the Constitution of India and on an occasion or two, even the Supreme Court.
2. While more often than not, it is the Assessee who is normally aggrieved by the orders passed by the Tribunal either granting partial waiver of the amount required to be deposited for maintaining the appeal before the Tribunal or in some cases not-granting any waiver, this time the revenue is before this court questioning the legality of one such order passed by the Tribunal where under the Tribunal has granted full waiver of the requirement of the deposit of the amount, amount that is the subject matter or dispute in the appeals pending before it, in terms of the Order dated 13.12.2004. The impugned order is one passed in common in several appeals, pending before the Tribunal, namely, Excise Appeal Nos. 590-591/2004 and Excise Appeal No. 1051/2004.
3. The value of the subject matter in appeal Nos. 590-91/2004 is said to be of a sum of Rs 35 crores and the value of the subject matter in appeal No. 1051/2004 is said to be Rs 29 Crores. It is mainly disputing this liability which the respondent was required to meet in terms of the adjudication orders passed by the Commissioner of Central Excise who had adjudicated certain show cause notices that had been issued to the respondent No. 2, inter alia, apprising the respondent No. 2 that it is liable for payment of such excise duty for the period from April 1997 to March 2001, in all, totaling Rs 35 Crores in terms of the order dated 28.2.2004 and the liability for the period April 2001 to March 2004 amounting to Rs. 29 crores in terms of the order of the Commissioner dated 12.7.2004.
4. It is such liability that had been called in question in appeal Nos. 590 & 591/2004 and 1051/2004. In so far as Appeal Nos. 590 & 591/2004 are concerned, the respondent had filed an application for dispensation of the pre-deposit amount invoking the proviso to Section 35-F of the Act and such an application has come to be ordered by the Tribunal in terms of its Order dated 10.8.2004. That was an order that had been passed in respect of the amount required to be deposited for maintaining the appeal Nos. 590 & 591/2004 and the tribunal in terms of the order dated 10.8.2004 has called upon the respondent to pre-deposit a sum of Rs. 25 crores within a period of four months form the date of the order and report compliance by 20.12.2004, while the balance of the duty and penalty under the impugned order were waived from deposit and recovery also was stayed pending disposal of the appeals.
5. The Respondent No. 2 had come up with further application, one application for raising additional grounds in the two pending appeals, namely, appeal Nos. 590 & 591/2004 and a further application praying for modification of the earlier interim order dated 10.8.2004. The applications were numbered as Misc. Application Nos. 729 and 730 of 2004 for modification and Misc. Application No 851/2004 for raising additional grounds. Respondent had also filed an application for dispensation of the pre-deposit in the appeal for the subsequent period i.e. in appeal No. 1051/2004 through the stay application No. 633/2004.
6. The Tribunal has disposed of all these applications, namely, Misc. Applications that had come to be filed in pending appeal Nos. 590 & 590/2004 and stay application in appeal No 1051/2004. The Tribunal under the order, while modified its earlier order dated 10.8.2004 that had been passed under the proviso to Section 35-F of the Act and permitted total waiver of the requirements of pre-deposit, following such an order allowed the stay application filed in appeal No. 1051/2004 and also permitted total waiver of the pre-deposit of a sum of Rs 29 crores, subject matter of appeal in A No. 1051/2004.
7. The net result of this order in the several applications is that the Tribunal has granted total waiver of requirement of pre-deposit of a sum of Rs 64 crores in all and the revenue feeling greatly at loss for having suffered such an order, has approached this court invoking jurisdiction under Articles 226 and 227 of the Constitution of India.
8. It is no doubt true that these writ petitions present a new dimension of the good old problem of the manner in which the Tribunal has exercised its power under the proviso to Section 35-F of the Act, but this new dimension is rather unusual and even one that can be characterized as startling.
9. The respondent took notice on 1.3.2005 (who has entered caveat) and an interim order staying the operation of the order of the Tribunal dated 13.12.2004 for a period of four weeks was passed with liberty reserved to the respondent to seek for modification of the order. The matter had been listed on further dates and at one point of time it was at the stage of exploring the possibilities of an amicable settlement between the Assessee and the revenue in so far as the question for the requirement of pre-deposit was concerned and for such purpose, meetings had taken place through their learned counsel. However, that having not come through and the respondent having come up with an application praying for modification of the interim order, the matter was heard further and with the consent of the learned counsel appearing for the parties, as taken up for disposal itself rather than passing further orders with regard to interim aspects.
10. I have heard Shri Ashok Haranahalli, learned Counsel for the petitioner and Sri Habibulla Badsha, learned Senior Counsel appearing for the respondent, at considerable length and over several days.
11. Submissions on behalf of the petitioner who has challenged the impugned order, is that the order passed by the Tribunal is one without due application of mind; that it has not considered the relevant aspects; that the Tribunal which had once passed an order on an application under the proviso to Section 35-F of the Act, has entertained yet another application for the very purpose; that it has virtually gone back on its earlier order, that it has substituted its earlier order by the subsequent order, that while passing the subsequent order in terms of the impugned order, the Tribunal has given a total go bye to the requirements of the proviso to section 35-F of the Act and the interest of the revenue, that the order is one which is a non-speaking order, not showing any awareness to the relevant provisions of the Act; that the order does not even indicate the justification and necessity to pass such an order; that it cannot sustain scrutiny for the purpose of conformity with the requirement of proviso to section 35-F of the Act; that the order requires to be set aside.
12. Submissions are elaborated by drawing attention to the relevant portions of the order; that while the earlier order that had been passed in Appeals No 590 & 591/2004 has come to be modified allowing total waiver of the pre-deposit requirement, in respect of the other appeal, the same order has been simply followed and granting such an order in favour of the respondents in other appeal suffers from the same defect; that both the orders are required to be set aside.
13. Shri Ashok Haranahalli, learned counsel for the petitioner, further submitted that until and unless the Tribunal has taken into consideration the relevant aspects and has shown its awareness to such aspects and the order itself indicates the awareness of mind on the part of the Tribunal to such aspects, the order becomes one which is a non-speaking order, in the sense that, the reasons for the order are not forthcoming in the very order and the order cannot be sustained. Learned counsel has placed reliance on the single Bench decision of this Court in the case of Sunshine Tube Pvt. Ltd. v. Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) and Anr., 1996 (6) KLJ 643); that the Tribunal has not at all adverted to the aspect of hardship, particularly by examining the financial position of the respondent; that the order is totally lacking for want of such examination; that it is not order in the eye of law and the more the orders are required to be set aside.
14. It is the further submission of Shri Haranahalli that the requirement of deposit is the normal rule as provided under the main provision of Section 35 of the Act and the proviso which confers a discretion in favour of the Tribunal to dispense with any part of such deposit is only an exception to the normal rule of pre-deposit; that such dispensation can be ordered only if the Tribunal is satisfied about the undue hardship that the person may suffer if insisted on complying with the requirement of pre-deposit; that even while dispensing with the pre-deposit whether in part or in total, the Tribunal is required to take into consideration the interest of the revenue and the Tribunal is duty bound to safeguard the interest of the revenue; that commensurate conditions should necessarily be imposed on the person seeking waiver of pre-deposit; that a blanket order without any safeguard and even without examining the question of hardship to the applicant is an order which is not sustainable in law and in support of the submission, has placed reliance on the decision of the Supreme Court reported in 'Union of India and Anr. v. Jesus Sales Corporation : 1996(83)ELT486(SC) . Learned Counsel drawing support from this decision, submits that the Supreme Court had an occasion to examine the second proviso to Section 4-M of the Import Export Act, 1947 in which the relevant provision is in pari materia to the proviso of Section 35-F of the Central Excise Act; that in fact, conditions in the proviso to Section 35-F are more onerous and in such a situation, the duty cast on the Tribunal while passing orders under this proviso is a bounder duty which the Tribunal should strictly comply with and non-compliance vitiates the order. Learned counsel submits that a plain reading of the order indicates that there is absolutely no consideration of the relevant aspects such as undue hardship and the question of safeguarding the interest of the revenue. Mr. Haranahalli further submits that the Tribunal has based its order solely on its finding that the applicant has a goods prima facie case and has passed such orders.
15. In this regard, learned counsel for the petitioner draws the attention of the court to the Judgement of the Supreme Court in Jesus Sales Corporation's case (supra). Submission is that the tribunal has exhibited a total lack of awareness about the existence of the factual hardship to the petitioner and also total lack of awareness on the part of the Tribunal to apply its mind with regard to the aspect of protecting the interest of the revenue.
16. Learned counsel for the petitioner has also placed reliance on a decision of the division Bench of this Court in the case of Wipro Infotech Ltd. v. Customs, Excise and Gold (Control) Appellate tribunal : 1995(75)ELT266(Kar) and has drawn the attention of the court of para-21 of this judgment wherein the division Bench had an occasion to refer to the caution sounded by the Supreme Court in the case of 'Assistant Collector of Central Excise v. Dunlop India Ltd. and Ors.' : 1985ECR4(SC) .
The observation of the Judgement of the Supreme Court at Paragraph 21 of the Judgement of this court reads as under :
'But since the law presumes that public authorities function properly and bonafide with due regard to the public interest, a Court must be circumspect in granting interim orders causing administrative, burdensome inconvenience or 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 prima facie case has been shown. There can be and there are no hard and fat rules. But prudence, discretion and circumspection are called for. There are several other vital considerations apart form 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. We often wonder why in the case of indirect taxation where the burden has already been passed on to the customer, any interim relief should at all be given to the manufacturer, dealer and the like.'
Submissions is that the impugned order suffers for want of non-consideration of the relevant aspects.
17. Learned counsel for the petitioner has also submitted that the Tribunal, while passing the impugned order has proceeded on the exclusive premise that the appellant before it has a good prima facie case, in the sense that, the activity in respect of which excise duty was sought to be levied was one which was not even excisable as the activity could not be characterized as a manufacturing activity itself and in such an event, there was no duty liability at all under the Act.
18. Learned counsel submits that such a finding and conclusion virtually amounts to the Tribunal sitting in judgment over its own order; that it has acted as an appellate authority, particularly, in the light of the earlier order dated 10.8.2004 wherein the very Tribunal has observed that the appellant did not have a strong prima facie case in their favour, particularly, in applying the rule enunciated by the Supreme Court in the case of M/s. Pepsi Foods Ltd., a situation which in its opinion was identical with the facts and situation in the appellant's case. It is in this context that the learned counsel for the period points out that even the very conduct of the assessee had indicated that the assessee had accepted the duty liability in respect of the activity of mixing food flavors which it was supplying to its customers including the bottling plants which were functioning under the licence from the assessee, that the dispute arose only in the context of the valuation of the food flavors that was being sold by the assessee; that the assessee for all the earlier years had paid the duty on its own, based on the invoice value of the product as and when cleared from the factory and in a situation of this nature, particularly, after the Tribunal has observed that there was no strong prima facie case in favour of the assessee, the Tribunal has done a somersault in coming to the diametrically opposite view that the assessee had a very strong prima facie case by upsetting the earlier finding which virtually amounts to acting like an appellate authority and the exercise of such powers is much beyond the scope of even Rule-41 of the Rules and clearly beyond the very appellate power under Section 35-C of the Act itself.
19. Shri Haranahalli submits that while the order in so far as it relates to the question of waiver of pre-deposit in respect of appeal Nos. 590 & 591/2004 is concerned, suffers for allowing full waiver by way of modification, the order in so far as appeal No. 1051/2004 is concerned, having merely followed the reasoning as spelt out in passing the modified order and not based on any independent reasoning nor the Tribunal having discussed the capacity and the situation in the context of the application for waiver of pre-deposit filed in Appeal No. 1051/2004, the order in this appeal also suffers from the same error apparent on the face of it. Learned counsel submits that the writ petition is one challenging these orders; that a prayer has been expressly sought for quashing the order dated 13.12.2004 inclusive of the order for waiver of pre-deposit passed in Excise Appeal No. 1051/2004 also.
20. One another contention urged on behalf of the petitioner is that the assessee had never raised any dispute about the excisability of the product; that it was sought to be raised for the first time only before the appellant Tribunal, that too by way of raising additional ground by filing Miscellaneous Application in pending appeals No. 590 & 591/2004 and was added as a ground in the further appeal No. 1051/2004; that the assessee had never disputed the excisability before the adjudicating authority either earlier or even when the adjudicating authority had issued a show cause notice for enhancing the value of the product by taking into account the benefits which the assessee was deriving in the form of payments of royalty from its customer and such other incidental payments which according to the adjudicating authority was required to be added to the value of the product, having regard to the special relationship that the assessee and its customers had inter se.
21. Mr. Haranuhalli further submits that an application under Rule 10 of the Rules had been filed seeking permission to raise additional grounds; that the revenue had no occasion to respond and oppose and even before that, the Tribunal has proceeded to modify its earlier order which in itself is against the requirement of granting proper opportunity and not following the principles of natural justice etc.,.
22. Statement of objections has been filed on behalf of the respondents. Respondent had also filed an application praying for vacating the interim order and that is how the matter was taken up. While the matter had been listed for orders on the application for vacating stay, with the consent of the learned counsel for both sides, the matter was heard for disposal. In fact, Sri Habibulla Badsha, learned Senior Counsel appearing for the respondent expressed the view that even if the interim order is modified, that may not serve that purpose of the respondent, in as much as, the Tribunal may not be very enthusiastic in proceeding with the main appeal during the pendency of the writ petition before this court and as such it is only the disposal of the writ petition that can pave the way of the Tribunal to proceed further in the matter and therefore sought for passing final orders.
23. Statement of objections are quite elaborate and voices preliminary objection about the maintainability of the very writ petition. It is pointed out that the writ petition being one directed against an interim order passed by the Tribunal in appeals pending before it, there is no occasion for this court to interfere with such interim orders of the Tribunal in the exercise of writ jurisdiction. Statement of objections dwells upon the merits of the matter with regard to the tenability of the grounds and additional grounds urged on behalf of the assessee before the Tribunal, that the conclusion reached by the adjudicating authority for holding that certain payments in the nature of royalty was received by the assessee from its customer in the context of the products sold to the customers, was not available on record; that the view taken by the Hydrabad Commissionerate in the case of Shaw Wallace Company Ltd., with regard to the excisability of the activity of mixing food flavour was required to be adjudicated in the present case also; that confirmation of the demand notice was not tenable in law; that on the identical questions, the matter had come to the Tribunal on an earlier occasion and on such occasion, the Tribunal had permitted pre-deposit of sum of Rs.2 Crores and had waived the balance pending disposal of the appeal; that as the Tribunal had not considered various legal contentions that had been urged on behalf of the appellant-assesses while passing earlier order dated. 10.8.2004 on the question of waiver of pre-deposit, it had become necessary for the assessee to file yet another application pointing out further merits of the appellant's case before the Tribunal and for seeking modification by the total waiver of the pre-deposit; that the issue of excisability of the activity of mixing food flavors was not one that had been concluded, but was still at large; that the Tribunal was fully justified in passing the impugned order; that the Tribunal having realized the large revenue at stake has itself directed expeditious disposal of the appeals and therefore no interference is called for by this court under the writ jurisdiction and writ petition is to be dismissed.
24. Submission of Sri. Habibulla Badsha, learned Senior Counsel appearing for the respondent is that the Tribunal has jurisdiction to modify its earlier order; that this submission is supported by the ruling of the Supreme Court in the case of J.K. Synthetics Ltd. v. Collector Of Central Excise' reported in : 1996(86)ELT472(SC) wherein the Supreme Court had an occasion to refer to the scope of Rule-41 of the CEGAT Appeal Procedure Rules; that when once it is found that the Tribunal has acted within its jurisdiction, such orders cannot be interfered in the exercise of writ jurisdiction even assuming that there are errors in passing such orders. It is not the function of this court to correct such errors of either facts or law more so when the nature of the order being an interim order and therefore the writ petition requires to be dismissed in limine.
25. Sri. Habibulla Badsha further submits that on a perusal of the writ petition pleadings, it is obvious that the challenge to the order is mainly on the ground that the Tribunal has modified its earlier order. This was in the context of the order passed in appeal Nos.590 & 591/2004; that in so far as appeal No.1051/2004 is concerned, there is no modification of any earlier order; that the order granting full waiver of the requirement of the pre-deposit was passed for the first time and therefore no fault can be found with this order so far as it relates to the waiver granted in appeal No.1051/2004; that when once the Tribunal has found that the appellant before it had a strong prima facie case and therefore was entitled to full waiver of requirement of pre-deposit, there is no scope for this court to interfere with such an order in the exercise of writ jurisdiction. Learned counsel elaborating the scope of interference with such orders, has placed reliance on the decision of the Supreme Court reported in the case of 'Smt. Ujjam Bai v. State of Uttar Pradesh' (AIR 1962 SC 1621 - Paragraph 15) = (2002-TIOL-260-SC-CT) as also the decision of the Supreme Court in the case of 'Dharanghadra Chemical Works Ltd. v. State of Saurashtra and Ors.' : (1957)ILLJ477SC .
26. Sri. Habibulla Badsha further submits that it is a well settled principle that in tax matters, there is no question of the applicability by the principle of res judiciata; that it is not as though the assessee assuming once had paid duty in respect of the activity of mixing of food flavors to be a dutiable activity and had paid excise duty on the same, could not because of that conduct contend that the activity is not a dutiable activity; that there is no duty liability on the part of the assessee in respect of such activity; that a question of this nature being in the nature of a question of law, the assessee can raise such a question at any stage even in the appellate stage and before the Tribunal; that it is not stopped from raising such a ground before the Appellate Tribunal; that it could raise such a plea even by way of additional grounds and if the assessee had raised such additional grounds, there was nothing wrong in the Tribunal having considered the same and having passed appropriate orders based on such additional grounds if it had found that the assessee had a good prima facie case on such consideration and had ordered full waiver pre-deposit requirement. In this regard; learned counsel places reliance on the decision of the Supreme Court in 'C.C.E. Ahmedabad v. Pioma Industries & Imperial Soda Factory' : 1997(91)ELT527(SC) .
27. Learned Senior Counsel for the respondent, further submits that it is not necessary for an assessee to plead and demonstrate undue hardship independently. The existence of a strong prima facie case in favour of the appellant in itself amounts to causing undue hardship to the appellant if the appellant is required to pre-deposit the amount disputed in appeal; that the phrase 'undue hardship' comprises of two components, namely, prima facie case and financial hardship; that the two are independent; that if an assessee demonstrates the existence of either, it is sufficient for the assessee to invoke the proviso under section 35-F of the Act for seeking waiver of the requirement of pre-deposit of the amount subject matter of appeal. In this regard learned counsel places reliance on the decision of the Supreme Court in the case of 'Mehsana Dist. Co-op. Milk P.U. Ltd. v. Union of India' : 2003(154)ELT347(SC) and submits that the Tribunal has jurisdiction to grant full waiver of requirement of pre-deposit in a given case; that an order passed by the Tribunal granting full waiver without insisting on any condition by itself cannot be characterized as an order bad in law and one calling for interference. Even assuming that it is erring in any manner in not imposing any condition, an order of this nature cannot be interfered in the exercise of writ jurisdiction and therefore urges for dismissal of the writ petition.
28. On consideration of the petition pleadings and submissions of learned counsel appearing for the petitioner and respondent, the only question that arises for consideration is as to whether the order can be interfered and if so in what manner. While the Tribunal having jurisdiction to pass orders in exercise of the power under proviso to Section 35-F of the Act is neither in doubt nor ever disputed, the question is not as to whether the Tribunal has jurisdiction, but the question is the manner in which such jurisdiction is exercised for example as to whether the Tribunal can keep passing successive orders in the exercise of this jurisdiction, as to whether it can modify an earlier order passed by it on merits, like an appellate authority or act like a forum which has the power to review its orders and if such successive orders are passed by the Tribunal can still be said that the Tribunal has the jurisdiction to pass such subsequent orders substantially altering or modifying its earlier orders.
29. The Customs, Excise and Service Tax Appellate Tribunal is a Tribunal constituted under the provisions of the Excise Act and a specialized Tribunal. A Tribunal of this nature is more a judicial forum than either being understood as an administrative or quasi-judicial forum. Even while administrative authorities pass orders touching upon the rights of parties, it is expected that such administrative authority should pass reasoned orders after taking into consideration the relevant aspects. An order passed by an administrative authority or quasi-judicial functionary without taking into consideration the relevant aspects and without disclosing the awareness to the relevant aspects in the order is characterized as an order without reasons, a non-speaking order and therefore becomes an arbitrary one attracting the vice of Article 14 of the Constitution of India. Such orders are quashed by writ courts as a matter of routine whenever the order lacks this requirement. A Tribunal of the nature of the Customs, Excise and Service Tax Appellate Tribunal constituted under the Excise Act with specialized expertise and knowledge being more a judicial forum, it is inevitable that such requirement applies a fortiori in the case of such a Tribunal. The Tribunal is always expected to act in consonance with the statutory provisions and should necessarily take into consideration all relevant aspects and should also indicate such awareness by passing a reasoned order. The order should speak for itself. The order should indicate the awareness of the Tribunal to such relevant aspects and the reasons for which the Tribunal has passed the order.
30. What is under consideration is an order passed by such a Tribunal in exercise of its power under the proviso to Section 35-F of the Act. As noticed earlier and in terms of the ruling of the Supreme Court in maintaining such appeals before the Tribunal, the normal requirement is that the amount subject matter of dispute in the appeal should be pre-deposited except as provided for in the proviso. The exception comes into play when the requirement results in causing undue hardship to the person who is required to pre-deposit and in such situations, if the Tribunal is of the view that it so results in such hardship to said person, it may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the interest of the revenue. Section 35-F reads as under:
'Section 35-F: 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 demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. PROVIDED that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner/Appeals/or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.'
31. A reading of the proviso clearly indicates that it is a precondition that the Tribunal should be satisfied about the cause of undue hardship to the person if the requirement of pre deposit is to be waived. For exercise of the power under the proviso to Section 35-F of the Act, such satisfaction should be reflected in the order and with reasons. Then follows the further requirement on the part of the Tribunal to impose such conditions as it deems fit so as to safeguard the interest of the revenue. It means that even while the Tribunal is fully satisfied that the requirement of pre-deposit, may cause undue hardship to the appellant, if the pre-deposit is insisted, while dispensing that, the Tribunal should necessarily take into consideration the interest of the revenue, in the sense that, the interest of the revenue should be safeguarded i.e., the payment of the duty, the subject matter of appeal, should be secured to the revenue in the event the appeal fails. The condition should be such as to ensure such safeguard to the revenue even while considering the appeal. Here again, the Tribunal should indicate its awareness to this requirement that under the circumstances, a condition that is imposed safeguards the interest of the revenue or in a given situation, the Tribunal may also take the view that no condition need be imposed as even otherwise the interest of the revenue is safeguarded. The question is not so much as to what order the Tribunal passes but as to why the Tribunal is passing that order. That reason should be spelt out in the order and should be available for apprising if one should read the order, as to why the Tribunal has passed such an order.
32. If these tests are applied to the present order, I find it woefully lacking in compliance with these requirements. Here is a very peculiar situation wherein the Tribunal had passed the orders under the very proviso once earlier when the respondent had come up with such an application. The Tribunal found in terms of the order dated. 10.08.2004 that the appellant did not have a good prima facie case at all in its favour; that the appellant had not even pleaded any financial hardship; that in such circumstances, the tribunal was of the view that in lieu of the requirement of pre-depositing a sum of Rs.35 crores towards duty and another sum of Rs.35 crores towards penalty which was the subject matter of appeal, deposit of a sum of Rs.25 Crores may be sufficient and deposit of the balance duty and penalty were all waived and stay to that extent granted; but the Assessee on coming up with an application for raising additional grounds, additional grounds wherein the Assessee sought to contend that the activity was not even excisable, for the first time before the tribunal, the tribunal suddenly gets active to sit in appeal over its earlier order dated 10.08.2004, virtually holds that the earlier order is wrong, further holds that prima facie the contention of the appellant as raised in the additional grounds that the products supplied by it to its customers did not involve an occasion to levy excise duty is the correct proposition. It holds on this occasion that the appellant-assesses has a strong prima facie case in its favour and in such view of the matter, deems it proper to modify the earlier interim order to grant full waiver of the pre-deposit requirement in respect of duties demanded which were subject matter of appeals in appeal Nos.590 & 591/2004. The modification order allows the assessee to maintain the appeal without depositing any part of Rs.35 Crores of duty and the penalty of Rs.35 Crores that it was liable to pay under the order appealed against. Even while passing this order, the tribunal neither shows any awareness that the requirement of pre-deposit causes any undue hardship to the assessee nor any awareness shown with regard to the safeguard that is required by way of conditions to be imposed on the assessee to protect the interest of the revenue.
33. I am unable to accept the contention that an existence of mere prima facie case in itself amounts to causing undue hardship to an assessee if the assessee is required to fulfil the requirements of pre-deposit. It is necessary to recall some words of caution and wisdom sounded by the Supreme Court in this regard in the case of Jesus Corporation referred to earlier. If the test is applied, the order is woefully lacking in the tribunal having not exhibited its awareness to the requirements of proviso of Section 35-F of the Act. It is also clear that the Tribunal after having exercised jurisdiction for the purposes of passing an order for waiver of pre-deposit under the proviso to Section 35-F of the Act cannot modify that order subsequently like an appellate authority, nor can keep tinkering with the order as and when applications for modification of the order are filed. It is significant to notice that the Supreme Court has ruled that the Tribunal does not even have the power to review its orders while exercising its appellate power under Section 35-C of the Act, See (2003) SCC 230-151 ELT 481 CCEVASCV Ltd., when this is the legal position with regard to the exercise of the power in respect of the main appeal itself, it cannot be higher while passing orders in exercise of the power under the proviso to Section 35-F, which is a provision stipulating the condition for the maintainability of the appeal.
34. The position with regard to passing orders on the application in Appeal No.1051/2004 is no different. Here again the tribunal does not discuss anything at all in the context of this appeal and the requirements, but simply purporting to follow the order passed in Appeal Nos.590 & 591/2004 seeking for modification. The requirement of pre-deposit in appeal No.1051/2004 is also waived in its entirety. The effect of this order is that the tribunal has dispensed with the requirement of pre-deposit of total duty amount of Rs.64 Crores as also the penalty amount of Rs.35 Crores without showing any awareness as to the existence of any undue hardship to the assessee if the assessee is required to comply with the provisions of Section 35-F and the proviso and in total disregard of the interest of the revenue by not providing sufficient safeguard. In fact, while in the earlier order, it is held that the appellant has not even pleaded any financial hardship, in the present order, nothing is mentioned at all. Here is a typical case of the tribunal acting more loyal than the King.
35. A specialized Tribunal like the Excise Tribunal is expected to act taking into consideration all relevant aspects and should never ignore the responsibility of safeguarding the interest of the revenue while exercising jurisdiction under the proviso to Section 35-F of the Act. The order is totally lacking in conforming to the requirement of Section 35-F of the Act. The exercise of power becomes totally arbitrary and if the petitioner complains detriment to its interest before this court, this court cannot shut its eyes to such glaring disparities writ large on the face of the record in the name of non-interference with an order of the tribunal just because it is urged that the Tribunal has jurisdiction to pass an order in exercise of such statutory power. The argument of non-interference with an order passed by the Tribunal with jurisdiction is called in aid only to safeguard and protect the order which the Assessee has managed to obtain before the Tribunal. It may be in the interest of the Assessee to retain such order and obviously the assessee seeks to support the order. But, the question is as to whether such an order can pass the test of a reasoned order. An order which cannot speak for itself, an order which has not taken into consideration all relevant aspects, particularly, the statutory requirements of the proviso to Section 35-F of the Act, in my view is an order that is not at all sustainable. It is a clear case of abuse and misuse of the powers under the proviso to Section 35-F of the Act.
36. On applying the legal principle laid down by the Supreme Court in the case of CCEVASCV Ltd (151 ELT 481), the impugned order deserves to be quashed as one without jurisdiction and left at it, insofar as it relates to the modification of the earlier order dated 13.12.2004, only that portion relating to the waiver of pre-deposit in Appeal No.1051/2004, while deserves to be quashed as a non-speaking order and as such requires to be remanded to the Tribunal the order being common and as the matter is required to be remanded to the Tribunal, for such purpose, I deem it proper to remand the matter to the Tribunal in its entirety with directions to the tribunal to apply the principles as indicated in this order and as ruled by the Supreme Court in the case of CCEVASCV Ltd (151 ELT 481) while passing orders afresh.
37. I also find that the decision of the Supreme Court in the case of J.K. Synthetics v. Collector of Central Excise (2002-TIOL-261-SC-CX) rendered in the context of the scope of Rule 41 of CEGAT Appeal Rules, is neither applicable to the present case nor does it advance the case of the respondent in any manner. It is only a mistake apparent on the face of the record that can be corrected by the tribunal and that power is not available either to correct the order on merits like an appellate authority or even to review its earlier orders in the absence of enabling statutory provisions conferring the power of review.
38. In the circumstances, the impugned order dated. 13.12.2004 passed by the Tribunal on applications for pre-deposit filed in appeal Nos.590 & 591/2004 and 1051/2004 is hereby quashed. A writ of certiorari is issued. Rule issued and made absolute.
39. The Tribunal is directed to reconsider the matter in the light of the statutory requirements under the proviso to Section 35-F of the Act and in the light of the observations made in the course of this order and to pass appropriate orders in accordance with law. Writ Petitions allowed. Parties are left to bear their own costs.