Centurion Laboratories vs Union of India (UOI)

D.A. Mehta, J.—This petition, though styled as a petition under Article 226 of the Constitution of India, is in effect a petition under Article 227 challenging the order of Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai made on 10-5-2005 (Annexure-H).

Heard Mr. Mihir H. Joshi, learned Senior Advocate appearing with Mr. S.N. Thakkar on behalf of the petitioners. Mr. Joshi has made various submissions as to validity of the Order-in-Original dated 31-1-2005 made by Commissioner of Central Excise and Customs, Vadodara-I. According to him not granting the documents which were requested for, not granting opportunity of cross-examination and not granting opportunity of hearing amounted to violation of principles of natural justice. In this connection he has placed reliance on following decisions of the Apex Court:

(i) Oudh Sugar Mills Ltd. v. Union of India 1978 (2) E.L.T. (172).

(ii) Swadeshi Polytex Ltd. v. Collector of Central Excise Meerut 2000 (122) E.L.T. 641 (S.C.).

(iii) Lakshman Exports Limited Vs. Collector of Central Excise,

(iv) Arya Abhushan Bhandar Vs. Union of India (UOI),

Alternatively, it was pleaded that the time for making deposit of the amount directed by the Tribunal be suitably extended. It was also submitted that the aspect of financial hardship has not been taken into consideration.

As is apparent, the scope of present proceedings is limited to appreciating whether the impugned order of Tribunal suffers from any jurisdictional error or can be termed perverse in any manner. The Tribunal while passing the impugned order has recorded in Paragraph No. 2 the case made out on behalf of the petitioner before it and in Paragraph No. 3 the case of the revenue. In Paragraph No. 4 the following findings have been recorded :

We have gone through the records and on careful consideration of the submissions made before us, we find that the department has furnished most of the documents. It is, however, true that some invoices which are relied upon were not supplied to the applicants. We find that the applicants could have furnished a reply on the basis of the documents given and contested the demand to the extent that based on the documents which were not supplied. At this stage to say that the applicants were prevented from furnishing any reply is not acceptable. Having regard to these circumstances, we direct the applicant unit to deposit Rs. 50 lakhs towards duty within 12 weeks. Upon such deposit further pre-deposit of balance duty and penalties is waived.

The petitioner was granted time to report compliance by 16-8-2005 while the order was made on 10-5-2005. Thereafter, the petitioner moved an application seeking reconsideration and modification of the stay order dated 10-5-2005 and the application was filed on 14-7-2005. Hearing of the said application took place on 19-8-2005 and time for making deposit was extended up to 30-9-2005 after rejecting the prayer for modification. This is apparent from communication dated 20-8-2005 addressed by the learned Advocates who had appeared before the Tribunal. Time for reporting compliance is on or before 5-10-2005.

The Tribunal in exercise of its discretion under provisions of Section 35F of the Central Excise Act, 1944 is required to take into consideration whether the petitioner has a prima facie case or not and whether the petitioner suffers from any financial hardship while deciding: firstly, whether the petitioner should be required to make deposit of any part of the duty demand, and secondly, whether there should be partial relief, if the petitioner is required to make such predeposit. In the present case, as can be seen from the facts on record, the Tribunal has taken into consideration both the requirements and after application of mind exercised its discretion directing the petitioner to deposit a sum of Rs. 50,00,000/-within a period of twelve weeks as against total demand of Rs. 2,17,79,009/- + Rs. 32,00,000/-. In the circumstances, it is not possible to state that the decision making process by which the Tribunal has directed the amount of pre-deposit of Rs. 50,00,000/- suffers from any legal infirmity. Needless to state that, merely because on the same set of facts and evidence on record, different conclusion might be possible, that by itself is not sufficient for the Court to exercise its extraordinary jurisdiction.

The alternative prayer to extend time for making pre-deposit is granted inasmuch as the petitioner who is required to comply with the order of pre-deposit by 30th September, 2005 shall now comply with the impugned order of Tribunal on or before 7th October, 2005 and shall report compliance of the same before the Tribunal on 14th October, 2005.

Subject to the aforesaid extension of time for making pre-deposit the petition stands rejected.