Bombay High Court

Kim Steel Strips Pvt Ltd. And Anr vs The Commissioner Of Central ... on 3 August, 2017

Bench: Anoop V. Mohta

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           IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                       APPELLATE SIDE CIVIL JURISDICTION

                         WRIT PETITION NO.5654 OF 2017

 1. Kim Steel Strips Pvt. Ltd.  Having 
 Registered Office At: B 11 MIDC 
 Taloja, District Raigad, Taloja Navi 
 Mumbai.

 2. Sanjiv Ajodiaprasad Guta 
 Occupation:Business Age:56 years, 
 Residing At: ''Harikunj'', Plot No. 
 149, Opposite HDFC Bank, Chembur 
 East Branch, 14th Road , Mumbai                            ...Petitioners

               Versus 
 The Commissioner of Central Excise 
 and Customs, Belapur 
 Commissionerate.                                          ...Respondent
                                .....

Mr. Tapan Thatte a/w Adv.Sagar S.Tambe for the Petitioner 
Nos.1 and 2
Mr.Swapnil Bangur a/w  Sham V.Walve for the Respondent 
No.1. 
                                ......

                                      CORAM : ANOOP V.MOHTA &
                                                     SMT. ANUJA PRABHUDESSAI,JJ.

DATED: 3rd August, 2017.

ORAL JUDGMENT ( Per: ANOOP V. MOHTA, J.):-

Rule. Rule made returnable forthwith. Heard finally by consent of

the parties.




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2       The Petitioners have invoked the writ jurisdiction of this Court to

challenge order dated 22.11.2016 passed by the Commissioner of

Central Excise and Customs, Belapur. In the alternative the Petitioners

have sought direction that Appeal filled by them should be heard

without insisting on monetary pre-deposit under Section 35 of the

Central Excise Act,1944. (The Excise Act).

3. The learned Counsel for the Respondent has raised a preliminary

objection about the maintainability of the Petition. He has submitted

that the Petitioners have an alternative remedy of filing a statutory

appeal under Section 35-B (1)(b) of the Excise Act, and hence they

should not be permitted to invoke the writ jurisdiction of the Court.

4. Mr. Tapan Thatte, the learned Counsel for the Petitioners

submits that, existence of alternative remedy is not a bar to writ

jurisdiction, specially when the impugned order is arbitrary and is in

violation of principles of natural justice. He has submitted that deposit

of 7.5 % of duty on penalty is the pre-requisite condition for filing of

the appeal. Such deposit condition is onerous. He has submitted that

the Petitioners are not able to pay such amount. He submits that the

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Petitioners cannot be deprived of the legal remedy solely due to his

financial difficulties. He, therefore, contends that this is a fit case to

entertain the writ petition or to waive the monetary pre-deposit. The

learned Counsel for the Petitioners have relied upon the judgments in

M/s.Baburam Prakash Chandra Maheshwari V. Antarim Zila Parishad

now Zila Parishad, Muzaffarnagar reported in AIR 1969 SC 556,

Government of Andhra Pradesh & Ors V. Smt. P. Laxmi Devi reported

in 2008(2) RCR Civil, 561 and Punjab and Haryana High Court passed

in Jindal Drugs Pvt.Ltd. V. Union of India reported in 2016(340) ELT

67.

5. In response, the learned counsel for the Respondent contended

that; the Petitioners have already filed the appeal; Section 35-F

contemplates the deposit of part of penalty or fine; they have neither

deposited the amount nor raised any substantial grounds of

arbitrariness or violation of principles of natural justice; or any sort of

illegality including breach of principles of the natural justice. The

decision relied upon by the Petitioners are distinguishable and are not

applicable to the facts of the case.




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6. We have considered the submissions advanced by the learned

Counsels for the respective parties. The Petitioners herein have

challenged the order passed by the Commissioner, which is Appellable

under Section 35-B(a)(b) of the Excise Act. Hence, there is no dispute

that the Petitioners have the alternative and equally efficacious remedy

to challenge the order passed by the Commissioner. In M/s.Baburam

Prakash Chandra Maheshwari (Supra) the Apex Court has held that :

''There are at least two well-recognised exceptions to the doctrine with regard to the exhaustion of statutory remedies. In the first place, it is well-settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under Art.226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course.-(See the decisions of this Court in Carl Still G.m.b.H.v. State of Bihar, AIR 1961 SC 1615 and Bengal Immunity Co.Ltd. V.State of Bihar, (1955) 2 SCR 603= (AIR 1955 SC 661). In the second place, the doctrine has no application in a case where the impugned order has been made in violation of the principles of natural justice (See 1958 SCR 595,605=(AIR 1958 SC 86, 93))''

7. In the instant case, the Petitioners have not challenged vires of

any provision of law. Though the learned Counsel for the Petitioners

have submitted vaguely that the impugned order is arbitrary and is in

violation of principles of natural justice, no such materials and grounds

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have been placed on record. Hence,the two well recognised exceptions

stated in the case of M/s. Baburam Prakash Chandra Maheshwari

(supra) are not applicable to the facts of the present case.

8. It is pertinent to note that the Petitioners have already filed an

appeal under Section 35-B(1)(b) of the Excise Act. Section 35-F of the

Excise Act mandates deposit of certain percentage of duty demanded

or penalty imposed before filing the Appeal. This Section reads thus:-

''Deposit of certain percentage of duty demanded or penalty imposed before filing appeal :- The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal-

(i) under sub-section(1) of section 35, unless the appellant has deposited seven and a half per cent. Of the duty demanded or penalty imposed or both, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the Commissioner of Central Excise;

(ii) against the decision or order referred to in clause (a) of sub-section (1) of section 35-B, unless the appellant has deposited seven and a half percent of the duty demanded or penalty imposed or both, in pursuance of the decision or order appealed against;

(iii) against the decision or order referred to in clause (b) of sub-section (1) of section 35-B, unless the appellant has deposited ten per cent of the duty demanded or penalty imposed or both, in pursuance of the decision or order appealed against;

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Provided that the amount required to be deposited under this section shall not exceed rupees ten crores:

Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014.''

9. A plain reading of this provision makes it clear that the deposit of

certain percentage of duty or penalty is a pre-requisite for filing the

appeal. The provision does not confer any powers on the appellate

authority to waive or reduce the mandatory pre-requisite. Furthermore,

the amounts which is required to be deposited, is 7.5% per cent of the

duty demanded or fine imposed, which cannot stated to be exorbitant.

The decision of the Apex Court in Government of Andhra Pradesh &

Ors. V. Smt. P. Laxmi Devi 2008(2) RCR Civil, 561 (Supra) would not

be applicable in the facts of the present case. Similarly, the decision of

Jindal Drugs Pvt.Ltd. V. Union of India 2016(340) ELT 67 of Panjab

and Haryana High Court is of no assistance as the Petitioners have no

where alleged contravention of any provisions of Excise Act. As stated