S.P.G.C. Metal Industries (P) Ltd. vs CEGAT

Sathiadev, J.—This appeal is preferred against the order in W.P. No. 13382 of 1989, which in turn was filed to set aside the order of the

Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench, dated 12-9-1989, in SB/S/Order No. 160/1989. It was an order

passed with reference to Section 35F of Central Act I of 1944. The only question that requires to be considered is, whether the condition imposed

by the Tribunal to pre-deposit a sum of Rs. 3,65,000/- would cause undue hardship to the appellant ?

In considering this aspect, the Tribunal, on the point taken, that with regard to biscuit tin components, a relief is ''prima facie'' climbable by the

appellant, had waived the demand made in respect of that category and confined the pre-deposit to Rs. 3,65,000/- representing the other

categories of demands made on the appellant. What is contended by Mr. Ramachandran is that, a misconception had been entertained by the

learned Judge that it was not the entire amount of Rs. 6,91,000/- odd claimed against the appellant, but only one-half of the amount is claimed;

whereas factually what is claimed is 100 per cent of the duty, which is claimed by virtue of the order of the Collector in relation to the concerned

categories of demand.

As repeatedly held, it is only the aspect of ''undue hardship'' that could be gone into at this stage, pertaining to the financial ability of the

concerned party to make the pre-deposit, as and when an appeal is preferred to the Tribunal. On this aspect, the turn over of the appellant, which

is more than rupees two crores for the year ending 31-3-1988 and the amount of Rs. 28,00,000/- recoverable by it as per the balance sheet under

the heading ""Sundry debtors and other debts"", had been taken into account. These are undoubtedly the opposite factors which could be taken into

account for the relevant period, and these by themselves would show that the appellant has the financial ability to raise the funds, if it is not

possessed of liquid cash to deposit the amount. Therefore, when its financial ability had been taken into account or the finding arrived at is

perverse.

Even then, learned Counsel Mr. Ramachandran would refer to Kelvinator of India Ltd, New Delhi Vs. Collector of Customs and Central Excise

(Appeals), New Delhi and others , but it was a case in which the Delhi High Court took into account the peculiar facts of the case, and held that,

when unjust enrichment is made out, the pre-condition need not be imposed under the facts and circumstances of the said case.

He would then refer to U.P. Lamination v. Union of India and Others 1985 (20) E.L.T. 243. But here again what was considered was the

scope of the decision of the Supreme Court in Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. and

Others, , and it was held that it had only cautioned the Courts to be discreet in exercising their jurisdiction, but had not taken away the power of

the court to grant appropriate interim orders.

As for Asha Rubber Industries, Bangalore Vs. Collector of Central Excise, Bangalore, , it had been held that normally it is not the function of the

High Court to interfere with a discretionary order passed u/s 35F of the Act, and it could be done only in deserving cases if it be shown that the

order of the Tribunal is perverse. Such a situation does not exist in this case.

Lastly, he would refer to Ashoka Rubber Products Vs. Collector of C. Ex., . But this decision does not take away the condition of pre-deposit,

as upheld by the Supreme Court, in the manner found in Section 35F of the Act. Therefore, when the Tribunal had taken into account the financial

ability of the Company and after giving waiver in respect of the demand pertaining to biscuit tins, and having directed the pre-deposit only in

respect of the other items, it cannot be treated as a perverse order.

Hence, this appeal is dismissed. Time for pre-deposit is extended till 31-12-1989.