Jindal Drugs Ltd. vs Commissioner of Central Excise

We have heard Mr. Sridharan, learned Senior Advocate appearing on behalf of the Appellant and Mr. Y.R. Mishra, learned Counsel appearing for the Revenue. With their assistance we have perused the order passed by the Member Judicial, Member Technical and the third Member (Technical) who agreed with Shri P.K. Jain (2014 (307) E.L.T. 285 (Tri.-Mum.)). Mr. Sridharan submits that a substantial question of law would arise for determination and consideration inasmuch as if at the stage of waiver of pre-deposit and stay there is difference of opinion between the Member (Judicial) and Member (Technical), then, this is a fit case where a balance could be struck and remedy of appeal available to the appellant should not be rendered illusory and infructuous. In ordering deposit of entire sum (cash deposit) this is precisely what has happened in the instant case. Mr. Mishra, learned Counsel appearing on behalf of the Revenue would urge that this a discretionary exercise carried out by the Revenue and merely because there is difference of opinion, it does not mean that this Court should interfere in its appellate jurisdiction, when the matter is at the stage of interim relief.

Having heard the parties at some length, we feel that in the light of difference of opinion between Member (Judicial) and Member (Technical) when the matter was referred to a third member at the stage and at which the matter was brought before the Tribunal, a reasonable exercise so as to balance the rights and contentions of the parties ought to have been carried out. In the matter of this nature, it is not expected that the Tribunal takes an extreme view and expresses virtually a final opinion on the merit of the controversy. These are matters where litigants are not expected to be non-suited at interlocutory stage. The remedy of appeal becomes meaningless and the legal provision nugatory by such extreme directions. That would mean that the exercise of discretion in the given case is arbitrary and capricious as well. Bearing in mind this salutary principle in the present case the Tribunal should have passed an order which protects the interest not only of the Revenue but prevents the appellant before us in not being non-suited completely.

It is this principle which is being applied by us and after hearing both the sides and perusing with their assistance the orders of the Tribunal at the interlocutory stage, we are of the opinion that the interest of justice would be served if this appeal is disposed of with the following directions:-

(a) On the appellant deposit sum of Rs. 4 crores (Rupees Four Crores only) in cash with the Revenue/Competent Authority and furnishing a bank guarantee of a nationalised bank for the balance sum (Rs. 9.50 crores) there shall be a stay in terms of the application which has been preferred before the Tribunal. At the request of learned Counsel Mr. Sridharan, Six weeks'' time is granted to the appellant to deposit and furnish the bank guarantee as above.

(b) In the event compliance is reported, the appeal shall be taken for hearing. An endeavour be made to dispose it of as expeditiously as possible and within a period of six months from the date the compliance is reported.

(c) All the contentions of both the sides on merits of the appeal are kept open. The Tribunal shall decide the appeal uninfluenced by any tentative or prima facie findings.

We have passed this order bearing in mind that the appellant has not raised the issue of financial hardship.