Benzo Chem Industries Pvt. Ltd. vs Union Of India (Uoi)
2001 Latest Caselaw 6 Bom

ORDER

1. Rule, made returnable forthwiih. Respondents waive service through learned Counsel Mr. Jetley. By consent, the petition called out for hearing and heard.

2. This writ petition is directed against an order of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) under Section 35F of the Central Excise Act, directing the petitioners to deposit a sum of Rs. 20 lacs as pre-deposit for hearing the appeal.

3. The facts are in short compass and this petition can be disposed of here and now. It is the petitioners' case that they used to send the semifinished goods to their sister concern for further processing and the same was returned to them after processing. While doing so, the requisite statutory registers were neither maintained not were deck rations filed with the concerned authority as required by law. However, :he petitioners contend that all material which had gone out of their factory has physically come back after processing, and that no material had been taken out of the factory for home consumption. The petitioners used to maintain statutory records upto October 1997 after which they had been not maintained, for which the petitioners have no valid explanation. The petitioners submit that their Company was raided sometime in February 1996 and a large number of its records were seized. Some of the records seized, inter alia, include private registers which, according to the petitioners, revea. the movement of the goods from and into the factory. The documents seized also include issue slips, which would evidence such movement of gcods from and into the factory, according to the petitioners. The Commissioner, by his order dated 20th December 1999, held against the petitioners. The order of the Commissioner shows that the private records maintained by the petitioners, which the petitioners claim indicates movement of goods from and into the factory had been seized under a panchnama. According to the petitioners, the Commissioner's order is erroneous because the Commissioner has not really gone into the issue that had been urged before him; at the highest, there was an infraction of the procedural requirement of law and that the petitioner had not claimed any Modvat relief which they were not entitled to do in law. It was on these grounds that the appeal was filed by the petitioners before the CEGAT.

4. The petitioners moved an application or waiver of the pre-deposit amount under Section 35F of the Act. The petitioners' case was that the seized records in the custody of the department would clearly bear out that no material had been removed from the factory of the petitioners for home consumption and that all material removed for processing had been returned to the factory after processing. The petitioners, therefore, contended that they had more than prima facie case; the petitioners also contended that the Commissioner had erroneously imposed a large amount of duty to the extent of more than Rs. 30 lacs with further penalty and, therefore, this was a fit case in which there should be waiver of the pre-deposit amount.

5. The Tribunal, in the impugned order, has noticed the contention of the petitioners, but summarily brushed it away by saying that the contention that the issue slips which were seized by the department would reveal the correct record is prima facie no answer. It also says that it was up to the petitioners to explain the position which it was not able to do before the Commissioner. Even if we assume that the latter observation of the Tribunal is right, we do not see any reason why the petitioners are not entitled to give the same explanation to the Tribunal when the records seized are in the very appeal before it. The Tribunal is the last fact finding authority under the Act and is entitled to reverse the finding of facts also. In these circumstances, we would have expected at least a prima facie consideration of the contention of the petitioners with reference to the seized documents. Unfortunately, such is not the case. In these circumstances, we are of the view that the orders of the Tribunal dated 4th September, 2000 and 7th December, 2000 need to be interfered with in exercise of our writ jurisdiction and that the matter be remanded to the Tribunal for a proper consideration of the contentions in the application under Section 35F.

6. In the result, we allow the writ petition and set aside the said orders disposing of the petitioners' application made under Section 35F of the Act; we restore the petitioners' application made under Section 35F with a direction that the Tribunal shall rehear the petitioners and give them an opportunity of satisfying it with reference to the seized records and decide on the merits of the application.

7. Rule accordingly made absolute with no order as to costs.

8. Parties to act on the copy of this order duly authenticated by the Associate of this Court.

9. Certified copy expedited.