Gujarat High Court Case Information System
Print
SCA/8549/2008 7/ 10 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No.8549 of 2008
===================================================
SUPER
INDUSTRIES, A PARTNERSHIP FIRM-Petitioner(s)
Versus
UNION
OF INDIA THRO. SECRETARY, & 1 - Respondent(s)
===================================================
Appearance
:
MR SN THAKKAR for Petitioner(s) :
1,
MR HARIN P RAVAL for Respondent(s) : 1,
None for
Respondent(s) :
2,
===================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 10/07/2008
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
This
petition challenges orders dated 17.12.2007 (Annexure-C) and
06.05.2008 (Annexure-F) whereunder the Customs, Excise and Service
Tax Appellate Tribunal, Ahmedabad (CESTAT) directed the petitioner
to deposit a sum of Rs.2 crores out of total demand of Rs.4.02
crores within the period specified.
The
petitioner is principally aggrieved by the second order dated
06.05.2008 and the learned advocate for the petitioner has
concentrated and made submissions only in regard to the said order
made by CESTAT. CESTAT had vide order dated 17.12.2007, after
hearing the parties and recording concession of the learned senior
advocate appearing for the petitioner, as to admitted liability to
the tune of Rs.90 lacs, reduced the total amount payable as
predeposit to the tune of Rs.2 crores in exercise of its
discretionary powers under Section 35-F of the Central Excise and
Salt Act, 1944 (the Act). The petitioner moved a modification
application requesting the Tribunal to modify its order dated
17.12.2007 on the ground that the petitioner was entitled to total
exemption by virtue of notification on which reliance was placed,
namely, Notification No.6/2000-CE dated 01.03.2000. CESTAT has
rejected the said modification application by observing as under:
?S2. On
matter being called today for ascertaining compliance of the above
order, the learned Advocate along with Shri Amrish Neema, Advocate
submits that nothing stands deposited by the applicant. However, our
attention has been drawn to modification application seeking
modification of the said Stay Order on the ground that the goods in
question (apart from the body tanks used for conveyance with
compressed or liquefied gas) stand exempted vide serial No.253 of
Notification No.6/2000-CE dated 1.3.2000. We find that apart from
the fact that the benefit of the said Notification was not claimed
by the appellant at the time of hearing of the stay petitions and no
arguments was advanced at that stage, we have seen the said
Notification, in the interest of justice and find that the same
stands discussed by the adjudicating authority and the benefit
stands denied for the reasons mentioned therein. The detailed
submission on the said issue an be advanced by the appellant at the
time of final disposal of the appeals. The Commissioner has already
held that the benefit of the Notification is not available to the
appellant. We do not find any justifiable reason to modify the said
order at this stage. We also note that the appellants have not
deposited the admitted duty liability of Rs.90 lakhs. We have
already considered the financial position, which in any case is not
disputed by the appellants at this stage. Accordingly, we dismiss
the modification application and in the interest of justice, extend
the period by another four weeks. The matter to come up for
ascertaining compliance on 9th June, 2008.??
Learned
advocate for the petitioner has vehemently assailed the impugned
order dated 06.05.2008 contending that the Tribunal has erred in not
considering the merits of the claim of the petitioner being governed
by the aforesaid Notification. It is further submitted that once the
petitioner was not liable to pay duty by virtue of entry at Sr.
No.253 of the said Notification dated 01.03.2000 any order of
predeposit in exercise of powers under Section 35-F of the Act would
be bad in law considering the fact that this was an issue which went
to the root of the controversy. In support of the submissions made
reliance has been placed on Supreme Court judgment in case of Benara
Valves Ltd. & Ors. Vs. Commissioner of Central Excise &
Anr., (2006) 13 SCC 347 to submit that the concept of undue
hardship as envisaged by Section 35-F of the Act has to take into
consideration peculiar facts and circumstances of the case and the
Tribunal is not expected to dispose of a petition for stay in a
routine manner unmindful of the consequences flowing from the order
requiring an assessee to deposit full or part of the demand. That
denial of interim relief should not be such as to shake a citizen’s
faith in the impartiality of public administration.
On
going through the extracted portion of the impugned order it is not
possible to accept the submissions made by the learned advocate for
the petitioner. Admittedly, as noted by CESTAT, the benefit of the
said Notification was not pressed into service by the petitioner at
the time of hearing of the stay petition and no arguments were
advanced at that stage. In fact the learned senior advocate
appearing on behalf of the petitioner before the Tribunal had
partially accepted the demand to the tune of Rs.90 lacs as noted by
the Tribunal in its first order dated 17.12.2007, but as noted by
the Tribunal in the impugned order dated 06.05.2008 even the
admitted duty liability of Rs.90 lacs had not been paid by the
petitioner till the point of time the modification application was
heard by the Tribunal. The Tribunal has further noted that in the
interest of justice the Tribunal has gone through the said
Notification and recorded a finding that the reasons which have
weighed with the adjudicating authority for denying the benefit
under the Notification prima facie do not warrant interference. The
Tribunal has further noted that the detailed submissions on the said
issue can be advanced by the petitioner at the time of final
disposal of the appeals. Holding that there was no justifiable
reason to modify the earlier order in light of the findings recorded
by Commissioner regarding the Notification not being applicable in
case of the petitioner the Tribunal has noted that the financial
position has also been considered by CESTAT.
In
the aforesaid judgment of the Apex Court in case of Benara Valves
Ltd. & Ors. Vs. Commissioner of Central Excise & Anr.
(supra) the concept of ‘undue hardship’ has been explained in the
following terms:
?S12.
As noted above there are two important expressions in Section 35-F.
One is undue hardship. This is a matter within the special knowledge
of the applicant for waiver and has to be established by him. A mere
assertion about undue hardship would not be sufficient. It was noted
by this Court in S. Vasudeva v. State of Karnataka that under Indian
conditions expression ?Sundue hardship?? is normally related to
economic hardship. ?SUndue?? which means something which is not
merited by the conduct of the claimant, or is very much
disproportionate to it. Undue hardship is caused when the hardship
is not warranted by the circumstances.
13. For
a hardship to be ?Sundue?? it must be shown that the particular
burden to observe or perform the requirement is out of proportion to
the nature of the requirement itself, and the benefit which the
applicant would derive from compliance with it.
14. The
word ?Sundue?? adds something more than just hardship. It means an
excessive hardship or a hardship greater than the circumstances
warrant.??
Applying
the aforesaid ratio to the facts of the case it becomes apparent
that the impugned order is not one which would result in grave
irreparable injury or shake a citizen’s faith in the impartiality of
the proceedings before the Tribunal merely because the Tribunal has
confirmed its earlier order of granting partial stay of demand.
Undue hardship is a matter within the special knowledge
of an applicant and has to be established by the applicant. A mere
assertion about undue hardship would not be sufficient as held by
the Apex Court. Once the subordinate authorities had dealt with the
Notification and recorded a finding about non-applicability of the
Notification to the facts of the case of the petitioner, if the
Tribunal agrees with such findings and refuses to intervene, it is
not possible to accept the contention of the petitioner that this
would result in undue hardship. Apex Court has, after referring to
its earlier decision, categorically observed that under Indian
conditions expression ?Sundue hardship?? is normally related to
economic hardship. In the present case the Tribunal has recorded
that the aspect of petitioner’s financial condition has duly
been considered and has not been disputed by the petitioner. In
fact, at the cost of repetition, it is required to be noted that
even the admitted liability to the tune of Rs.90 lacs has not been
discharged by the petitioner. The concession by the learned
Senior Advocate before CESTAT about the petitioner
being liable to the tune of Rs.90 lakhs itself indicates that
possibly the petitioner is not entitled to total exemption under the
Notification. The term ?Spossibly?? is used here bearing in mind
the fact the appeals are yet pending before CESTAT. On facts and in
circumstances of the case, nothing has been pointed out to show that
the impugned order results in an excessive hardship or a hardship
greater than the circumstances warrant.
The
petition being devoid of merits is rejected.
Sd/-
[D.A.
MEHTA, J]
Sd/-
[H.N.DEVANI,
J]
***
Bhavesh*
Top