M/S. Jai Ganesh Industries vs The Customs
2021 Latest Caselaw 12893 Ori

                IN THE HIGH COURT OF ORISSA AT CUTTACK

                              W.P.(C). No.14943 of 2014

             M/s. Jai Ganesh Industries, Cuttack ....                Petitioner
                                                   Mr. U.C. Mishra, Advocate
                                      -versus-
             The Customs, Excise and Service        ....      Opposite Parties
             Tax Appellate Tribunal, West
             Bengal and others
                                               Mr. Choudhury Satyajit Mishra,
                                          Sr. Standing Counsel, Central Excise

                       CORAM:
                       THE CHIEF JUSTICE
                       JUSTICE A. K. MOHAPATRA
                                       ORDER

15.12.2021 Order No.

05. 1. The challenge in the present petition is to the order dated 16th June, 2014 passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata (CESTAT) in Stay Petition No.SP-70002 of 2013 arising out of Appeal No.Ex.AP-70029 of 2013.

2. The aforementioned application was filed by the present Petitioner seeking a complete waiver of the pre-deposit of Central Excise duty of Rs.9,92,53,226/-, together with interest (not quantified) and equal amount of penalty imposed on the Assessee under Section 11AC of the Central Excise Act, 1944 (CE Act).

3. By the said impugned order, learned CESTAT directed the Petitioner to make a pre-deposit of 50% within a period of eight

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weeks from the date of communication of the order and report compliance on 18th August, 2014. On deposit of the said amount, the recovery of the balance amount of dues adjudged would remain stayed during pendency of the appeal. Failure to deposit the said amount would result in dismissal of the appeal without further notice.

4. The present Petition was listed for hearing before this Court on 25th August, 2014. This Court passed an interim order in Misc. Case No.13319 of 2014 that "proceedings before the CESTAT shall be kept in abeyance inasmuch as no demand shall be made with regard to duty, interest and penalty amounting to Rs.19,85,06,452/-, pursuant to order dated 07.11.2012 passed under Annexure-11." That interim order is continuing since then. In fact, the petition has been listed for the second time thereafter only today.

5. Pursuant to the order dated 25th August, 2014, counter affidavit has been filed on behalf of Opposite Party Nos.1 and 3.

6. The scope of the present petition is confined to the question of correctness of the order of the CESTAT declining the Petitioner's prayer for a full waiver of the pre-deposit.

7. Learned counsel for the Petitioner states that Petitioner is in financial hardship. After closure of the tobacco manufacturing unit, the Petitioner was unemployed and at present is in a precarious economic condition. It is further stated that if the Petitioner is directed to pay the aforementioned amount, there will be irreparable

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loss to the Petitioner. Learned counsel for the Petitioner adds that Petitioner even is not an Income Tax assessee.

8. The Petitioner's case is that he started manufacturing chewing tobacco and supplied it in the local market at Cuttack. Due to expansion of his business, he added other products like 'Sadapudia'. For that purpose, he purchased some used/old hand machine for packing tobacco. He established a unit in the name and style of M/s. Jai Ganesh Industries and started trial production. Later he started full-fledged commercial production of chewing tobacco and in a clandestine manner removed the excisable goods without payment of duty.

9. It appears that a raid was conducted by the Superintendent (Preventive), Central Excise & Customs, Cuttack Division on 19th January, 2011. As per the seizure list, two FFS (Form, Fill and Seal) packing machines were seized and sealed. Thereafter notice was issued to the Petitioner alleging evasion of payment of excise duty and proposing its recovery together with interest and penalty.

10. As far as the prayer for waiver of the pre-deposit is concerned, the settled legal position as explained in several judgments including Banaras Valves Ltd. v. Commissioner of Central Excise 2008 (12) STR 104 (SC) and Indu Nissan Oxo Chemicals Industries Ltd. v. Union of India 2008 (221) ELT 7 (SC) is that financial hardship cannot be the only factor to be considered by the CESTAT while exercising the power under Section 35F of the CE Act.

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11. The Punjab & Haryana High Court in Triveni Castings (P) Ltd. v. CESTAT 2011 (268) ELT 73 (P&H) held that the financial hardship of the Assessee has to be considered along with the need to protect the interests of the Revenue. That order was upheld by the Supreme Court by the dismissal of the Assessee's appeal in Triveni Castings (P) Ltd. v. CESTAT 2012 (278) ELT A 21 (SC).

12. In the present case, the adjudication order has been passed by the Commissioner after complying with all the procedural requirements. For the purposes of the present petition, since the scope is limited, the Court refrains from expressing any opinion on the merits of the case. Suffice it to note that in the context of the demand amount, and the nature of activity carried on, the partial waiver of 50% of the demanded amount for the purposes of pre- deposit cannot be held to be harsh or unreasonable.

13. Accordingly, the writ petition is dismissed. The interim order is vacated.

(Dr. S. Muralidhar) Chief Justice

(A. K. Mohapatra ) Judge U.K. Sahoo/Jagabandhu