TMI Blog2009 (9) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... eposit order - 3296 of 2009 - - - Dated:- 7-9-2009 - R.C. Chavan, J. REPRESENTED BY : S/Shri Vyankat Raman, Sr. Advocate, Rajnish Vyas and G. Natrajan, Advocates, for the Petitioner. Shri S.K. Mishra, Advocate, for the Respondent. [Judgment]. - This petition is directed against order passed under Section 35F of the Central Excise Act by Customs, Excise and Service Tax Appellate Tribunal on 9th June, 2009, [2009 (242) E.L.T. 434 (Tri. - Mum.)] while entertaining an appeal against order passed by the Commissioner of Central Excise, Nagpur, whereby the Tribunal granted waiver of only penalty but not the duty demanded. 2. The facts which are material for deciding this petition are as under : The petitioner is a manufacturer of MS Pipes. A contract of constructing water supply and sewage system at MIHAN at Nagpur had been allotted to M/s. Nagarjuna Construction Company Ltd. M/s. Nagarjuna Construction Company Ltd. has engaged the petitioner as supporting manufacturer to manufacture and supply MS (SAW) pipes from their factory in MIDC Area at Butibori. The petitioner sought exemption from Central Excise duty and therefore, obtained a Certificate from the Collector un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of an appeal against an order passed by Customs, Excise and Service Tax Appellate Tribunal on an application of the appellant seeking waiver of pre-deposit. It appears from paragraph 7 of the judgment that the appellant had challenged the order by filing Civil Miscellaneous Writ Petition before a learned Single Judge of Allahabad High Court. The learned Judge held that the petitioner had the remedy of filing an appeal before the Court under Section 130 of the Customs Act and therefore, the appellant had preferred an appeal before a division bench of the Allahabad High Court, which was disposed of by the judgment on which the learned Assistant Solicitor General placed reliance. The observation of the Court in paragraph 18 of the judgment may be usefully reproduced as under : "18. Moreover, from the substantial questions of law framed by the appellant we find that all these are basically those issues, which are yet to be decided in the appeal pending before the Tribunal and are not concerned with the question as to whether the Tribunal, in passing the order under Section 35F of the Central Excise Act and Section 129E of the Customs Act in respect to waiver has validly exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would show that an appeal against an order dealing with question of waiver of pre-deposit can be filed under Section 35G of the Central Excise Act, a Division Bench of the Delhi High Court has held that no substantial question of law would be involved in such an appeal and therefore, such an appeal may not be tenable, in the context of the provisions of Section 35 of FEMA. After carefully considering the arguments advanced, it seems to me that the expression used in Section 35G of the Act, namely to the effect that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal is wide enough to include in its ambit, even an order of waiver of pre-deposit under Section 35F of the Act. Though waiver of pre-deposit under Section 35F of the Act may be only an order incidental to hearing of an appeal it does not follow that such an order would never throw up any substantial question of law. Dismissal of an appeal or refusal to entertain such an appeal because it does not involve a substantial question of law need not be equated to non-availability of the remedy of an appeal. To put it differently, though situations in which appeals against orders rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93 AIR SCW 1899), after taking note of these facts, it was suggested that the possibility of an appeal from the Tribunals on questions of law to a Division Bench of a High Court within whose territorial jurisdiction the Tribunal falls, be pursued. It appears that no follow-up action has been taken pursuant to the suggestion. Such a measure would have improved matters considerably. Having regard to both the afore-stated contentions, we hold that all decisions of Tribunals, whether created pursuant to Article 323A or Article 323B of the Constitution, will be subject to the High Court's writ jurisdiction under Articles 226/227 of the Constitution, before a Division Bench of the High Court within whose territorial jurisdiction the particular Tribunal falls." In view of this he submitted that this Court may not entertain the present petition. 11. The learned counsel for the petitioner submitted that there is nothing to show that the Tribunal has been constituted under Article 323B of the Constitution. He submitted that the Tribunal has been constituted under Section 129 of the Customs Act, 1962 as may be seen from the definition in Clause (aa) in Section 2 of the Central Excise Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appellant. A Division Bench of Delhi High Court also took a similar view in B.L. Dhaluka v. Union of India, reported at 2003 (154) E.L.T. 59 (Del.). In Shri Krishna v. Union of India, reported at 1998 (104) E.L.T. 325 (Del.) a Division Bench of Delhi High Court held that if the appellant has such a strong prima facie case as is most likely to exonerate him from the payment and still Tribunal insists on pre-deposit it would amount to undue hardship. It is not necessary to refer to other decisions relied on by the learned counsel for the petitioner on the same point. 16. The learned counsel for the petitioner, therefore, submitted that it would have been necessary for the Tribunal to examine whether the petitioner had a prima facie case. 17. The learned counsel for the petitioner submitted that the petitioner was entitled to an exemption from payment of duty in view of two notifications dated 8th January, 2004 and 1st March, 2006. Under the notification dated 8th January, 2004 all items of machinery, including pipes for delivery of water from its source to the water supply plant, and from there to the storage facility, are exempt from the duty. Explanation in the said noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration to these submissions. We are afraid the stand of the Revenue suffers from certain basic fallacies, besides being wholly technical. In Kedarnath's case, the question for consideration was whether the requirement of the declaration under the proviso to Sec. 5(2)(a) (ii) of the Bengal Finance (Sales-tax) Act, 1941, could be established by evidence aliunde. The Court said that the intention of the Legislature was to grant exemption only upon the satisfaction of the substantive condition of the provision and the condition in the proviso was held to be of substance embodying considerations of policy. Shri Narasimhamurthy would say the position in the present case was no different. He says that the notification of 11th August, 1975 was statutory in character and the condition as to 'prior permission' for adjustment stipulated therein must also be held to be statutory. Such a condition must, says Counsel, be equated with the requirement of production of the declaration form in Kedarnath's case and thus understood the same consequences should ensue for the non-compliance. Shri Narasimhamurthy says that there was no way out of this situation and no adjustment was permissible, whatev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The learned Assistant Solicitor General submitted, and rightly, that reference in third column of the table in paragraph quoted above is to the quantity of water in million mm3 and not to the pipes intended for carrying this water. He submitted that even though the quantity 19.44 mm3 (millions) is for domestic use, it does not necessarily follow that this reflected the proportion of pipes used for providing domestic supply. The learned counsel for the petitioner submitted that reference to paragraph 14.8 in the order of the Commissioner was not intended to point out the proportion of pipes which may be used for a particular type of water supply. He, submitted that the entire pipe line would be used to supply water out of which a larger proportion would flow for domestic use. Thus, the entire pipeline would cater in a major proportion in domestic use and so would be entitled to be exempted. Therefore, according to the learned counsel for petitioner, his client had established a strong prima facie case, which ought to have persuaded the tribunal to grant full waiver. 25. I have carefully considered the arguments advanced. This is not shown to be a case covered by any judgment so ..... 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