Pasupati Spinning and Weaving Mills Ltd. vs Union of India (UOI)

D.K. Jain, C.J.—By this writ petition, under Article 226 of the Constitution, that petitioner questions the legality of order, dated 16-3-2004,

passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short ''the Tribunal'') in Stay Order No. S/142/04-NB(C). By

the impugned order, the Tribunal has directed the petitioner to deposit an amount of Rs. 20 lakhs, within 8 weeks, from the date of the said order,

as a pre-condition for waiver of the condition of pre-deposit of the remaining amount of duty and stay of the recovery of the additional demand

created against it.

Mr. Bali, learned Counsel appearing for the petitioner, has submitted that while making the said order, the Tribunal has lost sight of the

precarious financial condition of the petitioner. It is pointed out that the petitioner-company has been declared as a sick industrial unit under the

Sick Industrial Companies (Special Provisions) Act, 1985. Learned Counsel thus, submits that the imposition of stringent condition of pre-deposit,

which the petitioner would not be able to comply, makes the right of appeal illusory. Learned Counsel has also urged that the notification, on the

basis whereof the additional demand has been created, being under challenge, the requirement of pre-deposit should have been waived in entirety.

In nutshell, the submission is that the Tribunal has failed to exercise its discretion of dispensing with pre-deposit judiciously.

Having heard learned Counsel for the parties, we are of the view that the writ petition is bereft of any merit. It is evident from the order of the

Tribunal that the financial position of the petitioner as also the fact that the petitioner had moved the Board of Industrial and Financial

Reconstruction has been duly taken into consideration. Keeping in view the fact that the additional demand against the petitioner is more than Rs.

one crore, a direction to deposit only an amount of Rs. 20 lakhs cannot be said to be onerous or unreasonable by any standard. Therefore, the

amount directed to be paid more than one year ago needs no modification. We do not find any infirmity in the impugned order, warranting

interference.

Accordingly, the writ petition is dismissed. However, in the interest of justice, we direct that in case the petitioner deposits the amount, directed

to be paid by the Tribunal, on or before 15-11-2005, its appeal shall be entertained for disposal on merits.