SWARAJ MAZDA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner, a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985, (SICA) filed this petition under Article 226 of the Constitution seeking quashing of the order dated March 17, 1994 of the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi, (CEGAT) passed under section 35-F of the Central Excises & Salt Act, 1944, (for short 'the Act') whereby the petitioner was directed to deposit duty amount of Rs.1.40 crores as a pre deposit for the appeal to be heard. Rest of the demand was, however, stayed. Petitioner is engaged in the manufacture of chassis for motor vehicles. It says when the chassis are cleared from its factory premises it pays duty under heading 87.06 of the Central Excise Tariff whether the chassis sold to individual buyers or given to an independent body builder. In the present case, the body builder is Sutlej Coach Builders Pvt. It is stated that M/s. Sutlej Coach Builders Pvt. Ltd. fabricates the body on the chassis and then clears the fully built vehicle on pay ment of excise duty under heading 87.02 to the depot of the petitioner. It is thereafter that the petitioner effects sale of the fully built vehicle. Petitioner says that both the chassis as well as the fully built vehicles suffer appropriate excise duty at two different stages, and that the demand of the respondents seeking Central Excise Duty once again on the invoice price of the fully built vehicles from the petitioners on the ground that the petitioners were owners of the fully built vehicles was not legal. Petitioner says it cannot be treated as manufacturer of fully built vehicle and draws support from judgment of the Patna High Court in the case of TELCO v. Union of India, 1988 (35) ELT 617. It is on account of the duty demand of Rs.2,75,31,417.00 that the petitioner filed an appeal before the CEGAT who, as noted above, directed the petitioner to deposit Rs. 1.40 crores in cash as a pre-condition of hearing the appeal. Aggrieved, the petitioner has filed the present petition.

(2.) At the outset, it was submitted by Mr. Sorabjee, learned counsel for the petitioner, that the petitioner was a sick industrial company under the SICA and that in view of the judgment of this Court in M/s. Rubber Reclaim Company v. Union of India, CWP No. 220/93, date of decision 30 July 1993, the CEGAT was wrong in putting any condition of pre- deposit of the excise duty for any amount. This order in Rubber Reclaim Company is a brief order and is as under :-

(3.) Reliance has also been placed on a decision of the Calcutta High Court in Indian Jute and Industries Ltd. v. Collector of C. Ex (Appeals), 1992 (62) E.L.T. 290 (Cal). In Rubber Reclaim Company Ltd. this Court merely said that since the petitioner company was a sick undertaking in viewe of section 22 of the SICA it was not liable to pay any amount so long as it remained sick undertaking. In Indian Jute and Industries case the Collector (Appeals) had refused to grant any stay and the court said that the Collector had not made any enquiry about the sickness of the company and about the position of the assets and liabilities of the company.