Hotline Teletube and Components Ltd. vs Commissioner

Prayer in this petition is for quashment of order dated 11.04.2012 passed by the appellate authority of the respondents whereby the application for review of the order dated 01.02.2012 was dismissed. Undisputedly the petitioner was directed to pay sum of Rs.15,92,000/-on account of certain liabilities against which an appeal was filed alongwith an application with prayer to exempt from depositing the amount due. The application was disposed of vide order dated 01.02.2012 whereby petitioner was directed to deposit the amount of Rs.10 Lacs within six weeks. Thereafter review application was filed wherein validity of the order was challenged alleging that the petitioner be exempted but that application was dismissed, hence this appeal. The relevant section of the Central Excise Act, 1944 reads as under:-

Section 35F. Deposit, pending appeal, of duty demanded or penalty levied,- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied.

Provided that where in any particular case, the [Commissioner(Appeals)] or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the [Commissioner (Appeals)] or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.

The proviso empowers the appellate Tribunal to exempt the appellant from depositing the amount provided the appellate Tribunal is of the opinion that the amount demanded or penalty levied would not cause undue hardship to the appellant.

Learned counsel for the appellant further submits that the appellant is a closed unit and its parent factory is under BIFR. It is submitted that in the facts and circumstances of the case, the appeal filed by the appellant be allowed and the impugned order be quashed.

Miss Anuradha Singh, learned counsel for the respondents submits that the original order dated 01.02.2012 was passed by the appellate Tribunal whereby the appellant was given time to deposit amount and that order has not been challenged and the order dated 13.04.2012 is an order of the review. Since there was no mistake apparent on the face of the record, therefore, the appeal of the appellant be dismissed.

After hearing the learned counsel for the parties and keeping in view the fact that the application filed by the appellant was not considered by the appellate Tribunal, keeping in view the provisio of section 35F of the Act. The appeal filed by the appellant is allowed and the impugned order is set aside with a short direction that if the appellant deposits a sum of Rs. 2 Lac (Rupees Two Lacs) within a period four weeks from today then appellate authority shall re-decide the application filed by the appellant for exemption keeping in view the proviso of Section 35F of the Act. In case appellant fails to deposit the amount as directed, the appeal shall be treated as dismissed. With the aforesaid, petition stands disposed of.