Grasim Industries Ltd. Vs. Cegat, Madras - Court Judgment

Excerpt:

- .....impugned order is not sustainable. mr. datar further contended that a perusal of rule 57d of the central excise rules, 1944 clearly shows that the facts of the petitioner's case squarely come under the rule 57d(1). 4. on the other hand, the learned counsel for the respondents, mr. k. jayachandran submitted that the facts of the petitioner's case will come under rule 57f(iv) last proviso of the said rules and therefore there is no infirmity in the impugned order of the first respondent. 5. i have carefully considered the contentions of the learned counsel for the petitioner and the learned additional central government standing counsel for the respondents. in the instant case, the point for consideration is whether the first respondent has exercised its discretion under proviso to section 35f of the act, in accordance with law with regard to pre-deposit amount for entertaining the appeal under section 35b of the act. i am of the view that under proviso to section 35f of the act, the appellate tribunal is given a very wide discretion with regard to pre-deposit of duty demanded or penalty levied and the exercise of discretion must be in accordance with law and proper. even the.....

Judgment:

ORDER

1. By consent of parties, this writ petition itself is taken tip for final hearing.

2. The Petitioner M/s. Grasim Industries Limited which is a public limited company has approached this Court against the order of the Customs Excise and Gold (Control) Appellate Tribunal made under proviso to Section 35F of the Central Excises and Salt Act, 1944. The dispute relates to the adjustments of inputs of Visco Staple Fibre. The petitioner company was directed by the assessing authority, the second respondent-Commissioner of Central Excise, Belgaum to apportion the Modvat Credit between Visco Staple Fibre and Sodium Sulphate. The Commissioner of Central Excise with regard to seven show cause notices by order dated 12-4-1996 made a demand of Rs. 4,11,45,816/- and penalty of a sum of Rs. 20,00,000/- and direct the petitioner company to deposit a sum of Rs. 41,45,816/- and the penalty. Aggrieved by the same, the petitioner company preferred an appeal to the Customs, Excise and Gold (Control) Appellate Tribunal, under Section 35B of the Central Excises and Salt Act, 1944. The petitioner company has filed an application under Section 35F of the said Act. The Tribunal - the first respondent after considering the case of the petitioner passed the impugned order directing the petitioner company to deposit a sum of Rs. 1,00,00,000/- (Rupees one crore only) on or before 27-9-1996 and report compliance on 30-9-1996 for entertaining the appeal. Aggrieved by the same, the petitioner-company has approached this Court for the relief as prayed for.

3. Mr. Arvind P. Datar, learned Counsel for the petitioner company strenuously urged that there is an infirmity in the impugned order and the first respondent without considering the rulings cited in favour of the petitioner, has passed the impugned order. Therefore, the impugned order is not sustainable. Mr. Datar further contended that a perusal of Rule 57D of the Central Excise Rules, 1944 clearly shows that the facts of the petitioner's case squarely come under the Rule 57D(1).

4. On the other hand, the learned Counsel for the respondents, Mr. K. Jayachandran submitted that the facts of the petitioner's case will come under Rule 57F(iv) last proviso of the said Rules and therefore there is no infirmity in the impugned order of the first respondent.

5. I have carefully considered the contentions of the learned Counsel for the petitioner and the learned Additional Central Government Standing Counsel for the respondents. In the instant case, the point for consideration is whether the first respondent has exercised its discretion under proviso to Section 35F of the Act, in accordance with law with regard to pre-deposit amount for entertaining the appeal under Section 35B of the Act. I am of the view that under proviso to Section 35F of the Act, the Appellate Tribunal is given a very wide discretion with regard to pre-deposit of duty demanded or penalty levied and the exercise of discretion must be in accordance with law and proper. Even the perusal of the impugned order, it is clear that the first respondent has exercised its discretion taking into consideration prima facie case of the petitioner and it was of the view that the decision cited by the petitioner company will be considered at the time of final hearing of the appeal and as such there is proper exercise of discreation. On the ground of hardship, the second respondent has made a demand of Rs. 4,11,45,816/- and a penalty of Rs. 20,00,000/- whereas the Appellate Tribunal has directed the petitioner company to pre-deposit a sum of Rs. 1,00,00,000/- (Rupees one crore only). However, pre-deposit of a sum of Rupees one crore in one lump sum upon the facts and circumstances of the instant case will rest in undue hardship to the petitioner company. On this aspect of the matter, I feel that ends of justice will be served by directing the petitioner company to pay a sum of Rupees one crore in four equal instalment of Rs. 25,00,000/- from 1-11-1996. The first instalment of Rs. 25,00,000/- shall be paid on 1-11-1996, second instalment of Rs. 25,00,000/- shall be paid on 1-12-1996, third instalment of Rs. 25,00,000/- shall be paid on 1-1-1997 and the last instalment of Rs. 25,00,000/- shall be paid on 1-2-1997. On the payment of total instalments of Rupees one crore, the first respondent shall hear the appeal. It is open to the petitioner company to pay the above said amount in one lump sum if its financial resources improve. On the payment of the entire amount of Rupees one crore pre-deposited money, the first respondent-Tribunal shall hear and dispose of the appeal, in accordance with law within four weeks. This writ petition is ordered accordingly. Consequently, no order is necessary in W.M.P. No. 17611 of 1996.