Case Law Details

Case Name : A Plus Projects Technology (P.) Ltd. Vs Union of India (Bombay High Court)
Appeal Number : Writ Petition (L) No. 2886 of 2012
Date of Judgement/Order : 13/12/2012
Related Assessment Year :
Courts : All High Courts (3701) Bombay High Court (671)

HIGH COURT OF BOMBAY

A Plus Projects Technology (P.) Ltd.

Versus

Union of India

Writ Petition (L) No. 2886 of 2012

DECEMBER  13, 2012

JUDGMENT

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1. This petition under Article 226 of the Constitution of India challenges the order dated 18.10.2012 passed by the Commissioner (Appeals) Central Excise, Pune-I. By the aforesaid order dated 18.10.2012, the Petitioner has been directed to pre-deposit an amount of Rs.35 lacs under the proviso to Section 35F of the Central Excise Act, 1944 (the Act) for the purposes of hearing the Petitioner’s appeal on merits against the order dated 30.03.2012 of the Additional Commissioner of Central Excise, Pune-I.

2. The brief facts are as follows:

(a)          The Petitioner is engaged in manufacturing of Mobile Steam Generator and Bath Heater Assembly (said goods) falling under Chapter 84 of the Central Excise Tariff Act, 1985. The petitioner inter alia sells its said goods to M/s. Oil India Limited at Nil rate of duty availing the benefit of notification no.6/2006 dated 01.03.2006.

(b)          On 08.04.2011, a show cause notice was issued to the petitioner in respect of said goods sold to M/s. Oil India Ltd. to show cause why an amount of Rs.34.94 lacs should not be recovered as Excise Duty for the period October, 2009 to March, 2009 besides imposing equivalent penalty. The basis of the notice was that the petitioner was not entitled to benefit of Notification No. 6/2006 dated 01.03.2006 as conditions thereof were not satisfied.

(c)          The Petitioner responded to the notice and pointed out that the conditions of Notification No.06/2006 Central Excise dated 01.03.2006 inrespect of the said goods supplied to M/s. Oil India Ltd, were satisfied on merits. For the aforesaid purposes reliance was placed upon Project Authority Certificate issued by M/s. Oil India Ltd. that the said goods are required for petroleum operations under International Competitive Bidding and also exempted from payment of basic custom duties and additional custom duties by notification no.21/02-CUS dated 01.03.2002. Besides, the petitioner also contended that the notice is time barred.

(d)          Additional Commissioner of Central Excise, Pune-I by an order dated 30.03.2012 negatived the petitioner’s contention and confirmed the show cause notice dated 08.04.2011 demanding Excise Duty of Rs.34.94 lacs and also imposed an equivalent penalty.

(e)          Being aggrieved by the order dated 30.03.2012 by the Addl. Commissioner of Central Excise the Petitioner filed an appeal and an application for stay under Section 35F of the Act before the Commissioner (Appeals) Central Excise, Pune-I. At the hearing of the stay application, the petitioner submitted that they have a strong prima facie case for dispensing with predeposit of duty and penalty completely. The petitioner pointed out that the said goods supplied to M/s. Oil India Limited are exempted from the payment of custom duty under notification no. 21/02-Cus dated 01.03.2002 and also under International Competitive Bidding. In support reliance was placed upon the Project Authority Certificates issued by M/s. Oil India Ltd. from time to time.

(f)           The Commissioner (Appeals) Central Excise, Pune-I by an order dated 18.10.2012 after recording the petitioner’s above submission merely states that the petitioner have not made out any prima facie case for complete waiver of predeposit of duty, interest and penalty. In the circumstance, the Commissioner (Appeals) directed the petitioner to predeposit an amount of Rs.35 lacs under the proviso under Section 35F of the Act out of a total demand of Rs.69.88 lacs (Rs.34.94 lacs being duty and Rs.34.94 lacs being penalty) for the purposes of hearing the petitioner on merits.

3. Mr. Vadhyadhar Apte, Counsel appearing for the petitioner, in support of petition submits that the impugned order dated 18.10.2012 of the Commissioner (Appeals) Central Excise, Pune-I needs to be set aside as it is in the breach of natural justice. This is for the reason that the submission made by the petitioners were not considered and no prima facie view with regard to the petitioner’s contention is recorded in the order before directing the Petitioner to predeposit an amount of Rs.35 lacs.

4. On the other hand, Mr. Pradeep Jetly, Counsel for the Revenue reiterates the order dated 18.10.2012 and submits that no interference is called for as the petitioner had not pleaded any financial hardship.

5. We have considered the submission. We find merit in the submission of Mr. Apte that the order dated 18.10.2012 directing the petitioner to deposit of Rs.35 lacs is non speaking order. The impugned order does not consider and/or examine submission made by the petitioner in support of its prima facie case to take a prima facie view. We appreciate that at the time of disposing of the stay application, the Commissioner (Appeals) is not required to consider all the submissions made by the parties in depth. However, as he would be exercising a quasi-judicial function while directing the petitioner to deposit or not deposit any amount for the purposes of entertaining the petitioner’s appeal on merit, the same is required to be exercised by showing that he has at least prima facie considered the submissions of the parties before him. Merely because the petitioner has not pleaded any financial hardship, it would not follow that the amount of duty and/or penalty adjudicated by the lower authority has to be predeposited for the purposes of hearing of the appeal on merits. A strong prima facie case may at times constitute sufficient reason for dispensing with predeposit of any amount for the purposes of entertaining the appeal on merits. An illustration of such a case would be where the dispute is covered in favour of the party by a decision of a higher forum.

6. In the result, we quash the order dated 18.10.2012 passed by the Commissioner (Appeals) Central Excise, Pune-I and remand the matter to him for fresh disposal of the stay application after considering the submission of the petitioner and taking a prima facie view on the same. The petition is disposed of in above terms. No order as to costs.

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