A Plus Project''s and Technology Pvt. Ltd. vs Union of India

This writ petition under Article 226 of the Constitution of India is directed against the order passed by the Commissioner (Appeals) refusing to grant an unconditional stay on the amount of duty and penalty demanded. In other words, the application made for waiver of pre-deposit has been rejected in exercise of powers conferred by Section 35F of Central Excise Act, 1944. Mr. Joshi, learned Counsel appearing on behalf of the petitioner submitted that though the issue of financial hardship has not been raised but the petitioner is not financially sound so as to comply with the order of the Commissioner. Secondly, he submits that the Commissioner omitted from consideration completely the documents and has imposed an unreasonable condition for stay of the order under appeal. That condition cannot be complied with because it is totally onerous and arbitrary. A sum of Rs. 35 lakhs has been directed to be deposited which amounts to entire Central Excise duty demanded. For all these reasons and this is the second time the petitioner is required to approach this Court, that the Court must intervene and set aside the impugned order. When this matter was argued in the morning session, we inquired from Mr. Joshi as to whether the petitioner is ready and willing to deposit a sizeable amount and furnish security for the balance. Mr. Joshi took time to take instructions. Mr. Joshi reverted back and submitted that the financial condition of the petitioner is not sound and it will not be possible for it to deposit any money.

At the stage of granting interim relief, particularly relaxing the condition of pre-deposit, this Court and equally the appellate authority is not required to pass any final order or render a conclusive opinion on the merits of the controversy. All that the Court is required to find out is ''whether the petitioner has made out a strong prima facie case and whether the balance of convenience lies in favour of the party like petitioner.

Mr. Joshi would take us through the record so as to convince us that even the prima facie findings are not in consonance with the material produced. He has taken us through the excise entry and equally the documents produced to support his submission that the demand notice was totally unsustainable. He urges that an erroneous finding is recorded that the exemption of duty under Notification dated 1-3-2006 was not available to the petitioner. He submits that requisite certificates were produced and copies thereof have been annexed to the writ petition.

To our mind, it is not possible for us to go into these documents because that would amount to deciding the issue pending before the appellate authority and on merits. It has been rightly held by the appellate authority that the show cause notice was adjudicated by the Additional Commissioner of Central Excise, Pune-I Commissionerate. He passed order on 30-3-2012, confirming the demand of duty of Rs. 34,94,179/- along with interest under Section 11AB of the Central Excise Act as applicable during the relevant period. Further penalty of Rs. 34,94,179/- has also been imposed. On the earlier occasion and even now all that the Commissioner (Appeals) has directed the petitioner is to deposit a sum of Rs. 35 lakhs. However, the Petitioner is not satisfied with such directions. The appellate authority has carefully considered all the submissions and as were required to be considered at the stage of interim stay. A reference is made to all the documents and with a view to find out whether a prima facie case is made out or not. At the prima facie stage, the Court is not required to minutely and meticulously scrutinise each and every document produced. Suffice to state that once there is an order under challenge before the appellate authority then so long as it is not set aside and by a final adjudication, the appellate authority would not be justified in ignoring the findings in the order impugned before him. At the prima facie stage, all that the Authority was expected to find out is as to whether the duty has been demanded by relying on the relevant and germane material. It may be that the findings and conclusion in the order under appeal may be ultimately set aside but so long as they are not set aside, they cannot be completely brushed aside. In Paragraphs 8.1 and 9, the Commissioner (Appeals) has referred to the said findings and equally to the notification in question. We are not called upon to decide as to whether the interpretation placed on this notification is correct or not. This is not a stage to express any opinion on that aspect. To our mind, finding that a prima facie case to the extent noted is not made out, as the entire exemption of duty was not available, that the Commissioner (Appeals) directed the petitioner to deposit a sum of Rs. 35,00,000/-. We do not find that this direction is so palpably erroneous or vitiated by perversity so as to call for interference in our writ jurisdiction. Ultimately in interlocutory matters and at interlocutory stage, this Court would not interfere unless the jurisdiction has not been exercised in accordance with the settled principles. If that has been completely ignored or the remedy has been rendered totally illusory, this Court may interfere in its extraordinary jurisdiction. This Court would not substitute its finding and opinion with that of Commissioner (Appeals) merely because another view is possible. We do not find that the condition of pre-deposit as imposed is vitiated in the manner noted above. In such circumstances, this is not a fit case for interference in our writ jurisdiction. The writ petition is devoid of any merits. It is dismissed.