Allied Asia Gears Limited vs Union of India (UOI)

S.K. Seth, J.—This petition is directed against the order dated 12-2-2007 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi in Excise Appeal No. 3065/2006. By the order impugned, learned Tribunal has refused to waive the statutory condition of pre-deposit while considering the stay-application and directed the petitioner (appellant before the Tribunal) to deposit the entire duty demand within a period of 8 weeks from the date of the order. It was further directed that upon deposit of the entire duty demand, the requirement for pre-deposit of penalty shall stand waived.

Learned senior counsel appearing for the petitioner submitted that the Tribunal has rejected the prayer for waiver without taking into account the fact that the petitioner-company is a sick company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and the proceedings are pending before the Board of Industrial and Financial Reconstruction (BIFR). Placing reliance on the decision of Supreme Court reported in Mehsana Dist. Co-op. Milk P.U. Ltd. Vs. Union of India (UOI), and 1998 (103) E.L.T. 5 : Sangfroid Remedies Ltd. v. Union of India, learned senior counsel for petitioner submitted that the order impugned is unsustainable in law.

Per contra, learned Assistant Solicitor General for respondents submitted that in W.P. No. 3141/2006, a petition was filed against the similar kind of the order of the Tribunal and the said W.P. No. 3141/2006 was dismissed by the learned Single Judge, therefore, to maintain the parity, this writ petition should be dismissed.

In reply, learned senior counsel for petitioner submitted that against the order passed in W.P. No. 3141/2006, an intra-court appeal has been filed which is pending before the Division Bench and secondly, the petitioner in that case was not a sick industry and no proceedings were pending before the BIFR, therefore, according to him, the decision given in W.P. No. 3141 /2006 is distinguishable in the facts of the present case.

There is no dispute that an appeal is pending against the order passed in W.P. No. 3141/2006, therefore, in the opinion of this Court, the order passed in the said W.P. No. 3141/2006 would not come to the rescue of the respondents. In the light of the decisions of Supreme Court in Mehsana Dist. Co-op. Milk, P.U. Ltd. and Sangfroid Remedies Ltd. (supra), I am of the view that the order could not be sustained and it deserves to be set aside and is hereby set aside.

Accordingly, this writ petition is allowed. The petitioner will be free to renew the prayer for waiver of the pre-deposit which shall be considered and decided by the Tribunal in accordance with law.

In the result, writ petition stands allowed to the extent indicated hereinabove. There shall be no order as to costs.

C.C. on payment of usual charges.