Hotel Amarjeet Pvt. Ltd. vs Commissioner of Cus. and C. Ex.

B.P. Dharmadhikari, J.—Heard. Admit. Taken up for final hearing forthwith by consent of parties. Order passed by the Customs, Excise & Service Tax Appellate Tribunal, Mumbai dated 21-2-2013 [2014 (33) S.T.R. 259 (Tri.-Mum.)] directing appellant-Company to make pre-deposit of Rs. 53 lacs within a period of eight weeks u/s 35F of the Central Excise Act, 1944 has been questioned in the present appeal.

Submission of learned counsel for appellant is, appellant has got another hotel viz. M/s. Airport Centre Point Hotel and that Unit of appellant has been given exemption in the amount of tax on food items out of Service Tax under the proviso to sub-section (1) of Section 73 read with Sections 66 and 68 of the Finance Act, 1994. However, the Commissioner has in the matter of present appellant and its Unit at Ramdaspeth made an exception and the benefit or treatment given to said Unit known as Airport Centre Point Hotel has not been extended to it. He submits that in this situation, orders passed by this Court on 15th April, 2013 need to be confirmed during the pendency of appeal and appeal preferred u/s 86 of the Finance Act can, at the most, be expedited.

Mr. S.K. Mishra, learned ASGI relies on express language of Section 35F of the Central Excise Act to urge that power to grant waiver on compliance of condition of pre-deposit during the pendency of appeal being totally within the discretion of appellate authority, need not be disturbed since the main appeal is pending. He submits that exemption from pre-deposit can be granted provided any hardship is shown. He, however, contends that there is no such plea and effort on the part of appellant. Learned ASGI reiterates that the impugned order which directs appellant to make pre-deposit of Rs. 53 lakh does not call for interference. He attempted to show that total demand confirmed by the Commissioner was in excess of Rs. 1,10,00,000/- and equal amount has been saddled as penalty.

Thus, question whether order dated 18-2-2013 passed by CESTAT is legally sustainable is the substantial question of law involved in the matter.

We have perused the order passed by respondent Commissioner and the impugned order as also provisions of Section 35F of the Central Excise Act, 1944. No doubt, in a particular case, where the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, it may dispense with such deposit. The Appellate Tribunal has, therefore, to apply its mind to the facts of the case. Appellant has specifically urged in appeal that its other Unit has been given exemption and the same has been arbitrarily denied to present Unit. However, that ground appears to have not been looked into by the Appellate Tribunal. Thus, a material factor having bearing on the controversy has been lost right of. Appellant has been asked to make pre-deposit of Rs. 53 lakh u/s 35F of the Act. This Court granted stay of coercive recovery subject to appellant depositing Rs. 25 lakh. Admittedly, that amount has been deposited by appellant.

Impugned order is thus unsustainable. Taking over-all view of the matter, we direct appellant to furnish Bank Guarantee for additional amount of Rs. 28 lakh within a period of four weeks from today. If the Bank Guarantee is so furnished, Appellate Tribunal shall proceed to hear appeal on merit and take appropriate decision within further period of four weeks. With the above observations and directions, we partly allow the appeal and dispose it of accordingly. No costs.