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2014 (2) TMI 357 - HC - Central ExcisePenalty u/s 11AC - Whether the factual findings recorded by the Customs, Excise and Service Tax Appellate Tribunal, that the assesse has not made out a prima facie case or undue hardship to waive the pre-deposit under Section 35F of the Central Excise Act, 1944, could be set aside by way of judicial review without demonstrating that such a finding was perverse - Held that:- assessee is a manufacturer of asbestos sheets. The assessee claimed the benefits of the Exemption Notification No. 6/2002, dated 1 March 2002 during the year 2003-04 and 2004-05. The Commissioner of Central Excise on the basis of materials, arrived at a prima facie satisfaction that the assessee wrongly availed the benefits of the exemption notification. This resulted in issuing a show cause notice dated 7 April 2008 to the assesses proposing to levy an amount of Rs. 15,37,57,177/-towards Excise duty. Even though the assessee tried to justify their stand that they have correctly availed the benefits of the exemption notification, the Commissioner of Central Excise has, by giving certain reasons, suggestive of lack of bona fides, confirmed the demand. In case the appellant invokes the proviso to Section 35F to dispense with the requirement regarding pre-deposit, necessarily, the essential conditions should be satisfied. The Appellate Authority is expected to consider the relevant materials for the purpose of dispensation of pre-deposit. The Tribunal must consider the prima facie case, balance of convenience and undue hardship. Undue hardship cannot be decided without making an attempt to consider the prima facie case. The Tribunal is expected to safeguard the interest of the Revenue also. While considering the applicability of the proviso to Section 35F of the Act in a given case, necessarily, the Tribunal should consider the interest of the Revenue also. In case the available materials are sufficient to arrive at a finding that the assessee has no prima facie case and the pre-deposit would cause undue hardship, necessarily, pre-deposit should be insisted. There is an element of discretion available to the Appellate Tribunal in such matters. The discretion should be exercised in accordance with the settled legal principles. The materials available on record should suggest a prima facie case in favour of the appellant besides undue hardship. When a finding is recorded with respect to prima facie case and undue hardship by CESTAT, in exercise of the power conferred under the proviso to Section 35F or the Act, such finding should be given due weight unless there are materials to show that the finding was perverse and no reasonable person would have arrived to such a finding on the basis of available materials. Each case has to be decided on its own peculiar facts. Single Judge was not correct in upsetting the findings recorded by the CESTAT with respect, to prima facie case and undue hardship. Accordingly, the order dated 14 February, 2002 in W.P. No. 2094 of 2012 is set aside. The order passed by CESTAT on 8 December, 2011 is restored - Decided in favour of Revenue.
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