GURIND INDIA PVT LTD Vs. CEGAT

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India the petitioner challenges an order dated 15-1-1998 passed by the Customs, Excise and Gold (Control), Appellate, Tribunal, New Delhi whereby it partly allowed the petitioner's application under proviso to Section 35F of the Central Excise and Salt and directed it to make a pre-deposit of Rs. 50,000/.

(2.) I have heard Shri J. Mathur learned Counsel for the petitioner, and Shri Shiv Kumar, learned Counsel for the respondents.

(3.) A demand of Rs. 1,64,227.17 has been raised against the petitioner by the Assistant Commissioner which is the subject-matter of appeal before the Tribunal. The demand arises out of Modvat credit availed by the petitioner in respect of grinding wheels used by it in the manufacture of glass goods. The petitioner's contention was that the grinding wheels are inputs used in the manufacture of the said grinding wheels while the case of the department is that it is not so and the Modvat credit was wrongly availed of under Section 35F, the appellant is required to deposit pending appeal the duly demanded of penalty levied. Proviso to Section 35F, however, authorises the Tribunal to dispense with such deposit subject to such conditions as it may deem fit if it is of the opinion that the deposit of duty demanded would cause undue hardship to the appellant. The petitioner's contention was that it has a good case on merit and therefore, it should be exempted from making the deposit. The Tribunal has stated that the issue is arguable and it granted partial exemption by directing the petitioner to make a deposit of Rs. 50,000/-. Shri Mathur strenuously contended that it has already been held that the parts of machine used in the manufacture of goods are inputs and therefore, the petitioner has strong prima facie case. Whether an item is an input or not must depend on the facts of the each individual case and has to be determined by the Tribunal in the appeal before it. The mere fact that the appellant has a prima facie case in its favour or even a strong prima fade case would not automatically create an undue hardship which requires to be relieved under the proviso of Section 35F. A copy of the application moved before the Tribunal has been annexed as Annexure 'A3' which shows that after saying that the appellant prima facie has a very good case on merit and balance of convenience was in its favour a bald statement was made that pre-deposit of a such heavy amount shall cause on undue hardship. The Tribunal has directed to deposit only Rs. 50,000/and therefore, there is nothing to show that even in the deposit of this amount the petitioner is likely to suffer on undue hardship. No cause for interference under Article 226 of the Constitution of India is, therefore, made out.