TMI Blog2006 (8) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners are entitled to deduct freight and insurance charges and also interest on receivables from the invoice value for calculation of the assessable value of the said goods, for the purpose of computation of excise duly. According to the petitioners, the petitioners were allowed 0.56% deduction on account of freight and insurance, during the year 1994-1995. 5. By a letter dated 15th January, 1996 the petitioners informed the Assistant Commissioner that the petitioners would deduct 3.06% from the invoice value of the said goods on account of interest on receivables. and 0.96% on account of freight and insurance, with effect from 15th January, 1996. 6. The petitioners were issued a show-cause notice dated 18th June, 1996 calling upon the petitioners to show-cause why deduction admissible in relation to insurance and freight charges should not be limited to 0.56% as per calculations shown in the Annexure to the said show-cause notice and also why deduction towards interest on receivables should not be considered inadmissible. 7. The petitioners claim to have submitted their reply to the show-cause notice inter alia contending that the deductions allowed for the year 1994- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Counsel for the appellant contended that the appellant company was before the BIFR and in view of its adverse financial conditions the pre-deposit may be waived. We are unable to accept this view because Section 22 of SICA will have no application to the provisions of Section 35G, as held by Hon'ble the Supreme Court in Metal Box India Ltd. v. CCD, Mumbai reported in : 2003(155)ELT13(SC) (SC). Even from the balance sheet as at 31stMarch 2005 which is on record, it is clear that the appellant has ample assets for discharging the governmental dues. 4. The appellant has not made out any prima facie case for granting interim stay of the impugned order. Therefore, the stay of duty amount is refused. We direct the appellant to deposit the amount of deposit within 8 weeks from today, following which the appeal shall stand dismissed. On such deposit being made, there shall be stay against recovery of the penalty imposed on the appellant. 16. Mr. Tarafdar appearing on behalf of the respondent authorities took a preliminary objection to the maintainability of this writ application! on the ground of existence of the alternative remedy of Appeal to the High Court available unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal would lie to the Supreme Court against an order of a Tribunal relating to determination of a question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. 19. An appeal lies to the High Court against an order of the Tribunal in appeal, not being an order relating to the determination of a question having relation to the rate of excise duty or to the value of goods for assessment, if the High Court is satisfied that the case involves a substantial question of law. 20. The Tribunal has not determined any question having relation either to the rate of excise duty or to the value of goods for assessment of excise duty. The order of the Tribunal is not appealable to the Supreme Court. 21. Mr. Tarafdar, emphasizing on the use of the phrase 'every order' in Paragraph 35G(1), submitted that an appeal would lie to the High Court from all orders of the Tribunal under Section 35F of the Central Excise Act, 1944. 22. The expression 'every order passed in appeal by the Appellate Tribunal' is qualified by a rider, that is, satisfaction of the High Court that the case involves a substantial question of law. 23. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equally efficacious remedy. 32. There can, however, be no doubt, that relief under Article 226 of the Constitution of India can be refused on the ground of alternative remedy, only if that alternative remedy is an effective remedy and, as observed above, equally efficacious. 33. The remedy of an Appeal to a Division Bench is certainly an equally efficacious, if not more efficacious remedy, warranting refusal to exercise jurisdiction under Article 226 of the Constitution of India. This Court would, therefore, refuse to entertain a writ petition challenging an order from which an appeal lies as a matter of course. 34. Where, however, the admission of an appeal from an order of a Tribunal is conditional upon' satisfaction of the High Court of the existence of a substantial question of law, and, therefore, fraught with uncertainty, it would not be proper for this Court to refuse to exercise its writ jurisdiction on the sole ground of existence of an alternative remedy of appeal and more so, when it prima facie appears to this Court that the order impugned does not give rise to any question of law that requires determination. This Court ought not to refuse to entertain a wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case warrant exercise of discretion in favour of the appellant and/or in other words, the appellant makes out a case of undue hardship. 43. It is well-settled by judicial pronouncements, that where an appellant has a gilt edged case or prima facie a very strong case, the requirement of pre-deposit of disputed amount of duty would itself cause undue hardship. The pronouncements proceed on the reasoning that compelling payment of any amount, that is, not payable results in undue hardship. 44. Where the appellant makes out a gilt edged case and/or prima facie a very strong case, the requirement of pre-deposit of the disputed duty and penalty might altogether be waived. 45. In the case of Bongaigaon Refinery Petrochem Ltd. v. Collector of Central Excise, A, Kolkata reported in : 1994(69)ELT193(Cal) , a learned Single Judge of this Court held that undue hardship 'would cover a case where the appellant had a strong case. The phrase would also cover a situation where there was an arguable case in the appeal. Where there was a strong case the Appellate Authority should dispense with pre-deposit altogether. In the latter case, that is, where the petitioner had an arguab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Central Excise Gold Appellate Tribunal (CEGAT) reported in , holding that exemption on account of post manufacture expenses such as freight and insurance were liable to be deducted for computation of excise duty. Mr. Dutta argued that the judgment operated as a precedent which the CESTAT was bound to follow. 54. Mr. Dutta relied on a judgment of a Division Bench of this Court in the case of J.N. Chemicals (PVT.) Ltd. v. CEGAT reported in : 1991(53)ELT543(Cal) where this Court held that the Appellant could be considered to have a good prima facie case when he was covered by another decision of the Tribunal and in such case pre-deposit of duty and penalty ought to have been dispensed with by the Tribunal. 55. Mr. Dutta relied on a judgment of the Supreme Court in the case of Government of India v. Madras Rubber Factory Ltd. reported in : 1995(77)ELT433(SC) where the Supreme Court held that post manufacture expenses such as expenses on account of freight and insurance were deductible. 56. Mr. Dutta relied on an order of the Supreme Court in the case of Sriram Fertilizers and Chemicals v. Union of India reported in 1997 (96)ELT 12(SC) where the Supreme Court followed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disputed duty and/or penalty is exercised against an assessee, it is mandatory for the Appellate Authority to disclose reasons for the same. 63. In the instant case, there is admittedly no discussion on the prima facie case, CESTAT merely recorded the ground on which the Commissioner (appeals) rejected the appeal, that is, the ground of the petitioner not substantiating statement of freight and insurance with any documentary evidence. 64. It is unfortunate that the CESTAT should have directed deposit of entire disputed duty failing which the appeal would stand dismissed notwithstanding the fact that the company was admittedly a sick industry that had been referred to the BIFR and the reference was still pending. There could have been no question of reference of the company to the BIFR unless its accumulated losses had exceeded its net worth. As observed above, the balance sheet on which reliance has been placed indicates loss of ₹ 6,55,50,193/- during the year ending 31stMarch, 2005. 65. The writ petition is allowed. The impugned order is set aside and quashed. The Tribunal shall reconsider the prayer of the petitioner for waiver of pre-deposit of the disputed d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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