SUMMERKING ELECTRICALS P LTD Vs. CEGAT

JUDGEMENT

(1.) From the record, it appears that the Commissioner, Central Excise, Meerut issued show cause notice on the petitioner as to why Central Excise Duty amounting to Rs. 80,72,573.45 be not recovered from them and as to why they be not penalized for contravening the various provisions of the Excise Act and Rules. Subsequently, on 11-3-1998, Central Excise Meerut adjudicated the case vide order dated 11-3-1998 and confirmed the demand duty. Being aggrieved by the said order the petitioners filed an appeal along with the stay waiver application before the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi. The Tribunal while considering the stay-cum-waiver application held that the Commissioner passed the said order in violation of principles of natural justice. In that view of the matter, it quashed the order dated 11th March, 1998 passed by the Commissioner, Central Excise, Meerut and remanded the matter to the adjudicating authorities for de novo consideration in the light of above observations. While disposing of the said applications the appeal filed by the petitioner was also disposed of. Since the impugned order passed by the Tribunal was quashed, as such, the appeal filed by the petitioner did not require further adjudication by the Tribunal. The Tribunal however directed the assessee to deposit a sum of Rs. 20 lakhs under Section 35F of Central Excise and Salt Act, 1944.

(2.) The contention of the petitioner is that once appeal has been disposed of by quashing the order passed by the Commissioner, hence there remained no tax or penalty payable by the petitioner nor there was any appeal pending before the Tribunal. In that view of the matter, no amount of deposit could be asked to be deposited by the Tribunal under Section 35F of the Central Excise Act, as such the direction for deposit of the said amount was totally illegal and without jurisdiction. Mr. Vikram Gulati has appeared for the department submitted that since the merits of the case were not decided in the appeal, as such, the pre-deposit of 20 lakhs was justified.

(3.) I have considered submissions put forward by the learned Counsel for both the parties and held that in the facts of the present case when the appeal and the stay waiver application were finally disposed of by the same order, as such, there was no appeal pending before the Tribunal, hence the question of pre-deposit of any amount under Section 35F of the Act did not arise. In that view of the matter, the direction for payment of pre-deposit was totally illegal and contrary to the provisions of Section 35F. In this connection I refer to two decisions one reported in 1996 (83) E.L.T. 29 (All.) - K.S. Steel Works v. Union of India and Anr. reported in 1996 (82) E.L.T. 177 (Bom.) - Suvidhe Ltd. v. Union of India. In the Allahabad decision, this Court was pleased to hold that once in appeal the Tribunal had set aside the order passed by the Court below and remanded the matter back. The appellant shall be entitled to refund to pre-deposit as after quashing the impugned order no demand existed. In the matter of Bombay High Court, the High Court held that the amount of pre-deposit was bound to be refunded when the appeal was allowed with consequential relief. The doctrine of unjust enrichment had no application to such deposits. In the instant case, the Tribunal has disposed of appeal as well as they stay waiver application by giving relief to the appellant remanding the matter back after quashing the impugned order, as such, no demand existed if any appeal kept pending. In that view of the matter, the direction for payment of Rs. 20 lakhs was totally illegal and without jurisdiction and the same was also contrary to the provisions of Section 35F of the Act. As such, there shall be stay of pre-deposit of Rs. 20 lakhs as directed by the Tribunal dated 14th July, 1998.