AUTOLITE INDIA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) IN these writ petitions, ordered passed by the Commissioner (Appeals) Jaipur in exercise of powers under Sec. 35f of the Central Excise Act, 1944, are under challenge. It so happened that against the petitioners assessment orders were passed levying excise duty and penalty. All the petitioners approached the Commissioner (Appeals) Central Excise in appeal. Applications have been moved under Sec. 35f of the Act of 1944 to the Commissioner (Appeals) claiming exemption to deposit the duty demanded or penalty levied as a condition precedent for hearing the appeal. The Commissioner without hearing the parties dismissed the applicants. The wording used while dismissing the applications are:- ". . . . IN the light of the above, I have considered the stay application, and am of the opinion that the appellants have failed to make out a prima facie case that deposit of duty demanded or penalty levied would cause undue hardship to the appellants in the event of their application for stay being rejected. The application for stay for the waiver of pre-deposit of the duty demanded and penalty imposed is accordingly rejected. However, I grant the applicant 3 weeks time from the date of passing of this order to comply with the provisions of the Section 35f of the Act and for producing evidence of pre-deposit. After expiry of 3 weeks interim stay period, the departmental authorities would be free to initiate such action as provided in the Central Excise Act, 1944 or the Central Excise Rules, 1944 for recovery of dues in arrears. If the appellants fail to deposit the dues within the stipulated period of interim stay period, the appeal filed by the appellants pending disposal with the undersigned shall be liable to be rejected without any further reference to them. "

(2.) THE Commissioner specifically mentioned that he has not heard the parties before the orders have been passed under Sec. 35f of the Act of 1944. He relied upon the judgment of apex court in Union of India vs. Jesus Sales Corporation (1 ). In our opinion the judgment delivered by apex court is in favour of petitioners and not against them. Import of the judgment can be had from what has been held by the apex court while considering the third proviso to sub-section (1) of S. 4-M of the Imports and Exports (Control) Act, 1947. THE apex court held that the provisions requiring pre-deposit of the amount of penalty of tax imposed before the appeals are heard are of two types. THEre are some statutory provisions which specifically prescribe and provide that before the appeals are heard, the amount of tax or penalty imposed have to be deposited. No discretion has been left by the statute in question in the Appellate authority to waive such deposit taking into consideration the hardships of the appellants concerned. THEre are other provisions where the requirement of pre-deposit empowers the appellate authority to dispense with the amount of penalty unconditionally or subject to conditions. When such provision is made in the statute then it is necessary for the appellate authority to apply its mind on the question like a quasi judicial authority taking all the facts and circumstances of the case into consideration including undue hardship which has been pointed out on behalf of the appellant. In the peculiar facts and circumstances of the case the apex court took the view that if personal hearing was not given to the party it would not invalidate the order passed, whereunder the exemption was granted to the respondent to deposit 75% of the amount of penalty and he was directed to deposit 25% of the amount only.