JUDGMENT
V.R. Kingaonkar, J.
1. Rule, returnable forthwith. By consent of parties the matter is heard finally.
2. By this petition, petitioners Impugned orders dated 5-10-2005 and dated 5-12-2005 passed by respondent No. 2-Customs, Excise & Service Tax Appellate Tribunal (for short “Tribunal”). The Tribunal directed the petitioner to pre-deposit Rs. 25,00,000/- (Rs. Twenty Five lakhs) within a period of eight weeks and report compliance thereof on 5-12-2005 as condition precedent to entertain the appeal as required under Section 35(F) of the Central Excise Act.
3. The petitioner No. 1 is a Textile Unit and was served with a notice under Section 3 of the Central Excise Act of 1944 by the Additional Director General of the Directorate General of Central Excise Intelligence, Zonal Unit, Mumbai on 13-11-2004. The petitioner was called upon to show cause as to why an amount of Rs. 1,00,32,600/- (Rs. One crore Thirty Two Thousand Six Hundred) be not recovered under the first proviso of Sub-section (1) of Section 11A of the Central Excise Act, 1944 along with interest. So also, petitioner No. 2, who is Director of the petitioner No. 1, was called upon to show cause as to why personal penalty be not imposed on him under Rule 209A of the Central Excise Rules, 1944. The petitioners submitted their explanations to the notices served on them. They urged that the demand was not proper and correct. The respondent No. 3 assessed them for tax liability and directed them to pay excise duty of Rs. 1,00,32,600/- (Rs. One crore thirty two thousand six hundred). They preferred separate appeals against the order of respondent No. 3 in respect of the demand for excise duty. The Tribunal directed them to pre-deposit an amount of Rs. 25,00,000/- (Rs. Twenty Five Lakhs) as condition precedent to entertain the appeals. The Tribunal further directed that on making such pre-deposit the recovery shall be stayed. The petitioners deposited an amount of Rs. 6,00,000/- (Rs. Six lakhs) and requested to modify the said orders. The petitioners, who were appellants before the Tribunal, urged to consider the financial hardship and to allow hearing of the appeals without asking for further deposit of the remaining amount of Rs. 19,00,000/- (Rs. Nineteen lakhs). Their request was rejected though the time for pre-deposit of balance amount was extended by further period of 12 weeks. Feeling aggrieved, the petitioners have preferred this petition.
4. We have heard learned Counsel for the parties and have gone through both the impugned orders. It is pertinent to note that the Tribunal has observed that prima facie the duty demand of Rs. 54,45,358/- (Rs. Fifty Four Lakhs Forty Five Thousand Three Hundred Fifty Eight) on account of clearance by misdeciaring the goods as supply of software design charges could be recovered from the petitioners. It is for such reason that pre-deposit of Rs. 25,00,000/-(Rs. Twenty Five Lakhs) was sought as precondition to entertain the appeal. It appears that the impugned order dated 5th October, 2005 does not refer to any financial hardship putforth by the appellants. The subsequent order dated 5th December, 2005 reveals that plea of financial hardship was pressed into service but the Tribunal rejected it on the ground that it was already taken into account while directing the pre-deposit on earlier date. These observations of the Tribunal, in the impugned order dated 5-12-2005, are without any substratum since the order dated 5-10-2005 in no way states that particular financial hardship of the petitioners was considered. It only reveals a general observation that considering financial position and taking all the factors into account, the direction was issued regarding pre-deposit of Rs. 25,00,000/- (Rs. Twenty Five Lakhs). There is no discussion regarding particulars of plea raised by the appellants in this behalf, consideration thereof by the Tribunal and application of judicial mind to such a submission. The petitioners have relied upon tax audit report and have inter alia contended that the Textile Unit is running in losses. The Tribunal has not assigned any reason while rejecting contention of the petitioners regarding financial hardship. We are, therefore, of the opinion that the impugned orders can not be sustained. They are non-speaking orders. We are inclined to hold that both the impugned orders are liable to be set aside and accordingly we set aside them and the matter is remitted to the learned Tribunal for consideration and disposal in accordance with law. The petitioners shall have liberty to adduce further evidence in support of their case regarding relaxation of the condition to pre-deposit the remaining amount and the Tribunal shall pass afresh order on merits, considering such evidence produced by the petitioners, as required under Section 35(F) of the Central Excise Act, 1944 within a reasonable time frame. In the mean while, till afresh decision of their application to waive the precondition of deposit, no coercive action may be taken against the petitioners.
5. Rule is disposed of accordingly. No costs.
6. The parties may be provided ordinary copy of this order duly authenticated by Court Associate on payment of usual copying charges.