1984 (11) TMI 63 - SC - Central Excise

Whether the company was not entitled to the exemption granted by notification dated April 6, 1984 as it had cleared the goods earlier without paying central excise duty, but on furnishing bank guarantees under various interim orders of courts?

Held that:- We do not have the slightest doubt that the orders of the learned single judge as well as Division Bench are wholly unsustainable that a prima facie case had been made out in favour of the company and should never have been made. Even assuming that the company had established a prima facie case, about which we do not express any opinion, we do not think that it was sufficient justification for granting the interim orders as was done by the High Court. There was no question of any balance of convenience being in favour of the respondent-company. The balance of convenience was certainly in favour of the Government of India. Governments are not run on mere bank guarantees. We notice that very often some courts act as if furnishing a bank guarantee would meet the ends of justice. No governmental business or for that matter no business of any kind can be run on mere bank guarantees. Liquid cash is necessary for the running of a Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance to realise that interim orders ought not to be granted merely because prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest. We are very sorry to remark that these considerations have not been borne in mind by the High Court and an interim order of this magnitude had been granted for the mere asking. The appeal is allowed with costs.