TMI Blog2009 (9) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnik, JJ. S/Shri D.B. Shroff, Senior Advocate with Avinash Joshi i/b., Mulla Mulla Craigie Blunt Caroe, for the Petitioner. S/Shri R.V. Desai, Senior Advocate with R.B. Pardeshi, for the Respondent. [Judgment per: Ferdino I. Rebello, J. (Oral)]. - Rule. Heard forthwith. 2. The petitioner by the present petition impugns the order dated 24th June 2009 [2009 (247) E.L.T. 622 (Tri. - Mumbai)] whereby the application of the petitioner herein for waiver of pre-deposit has been rejected and the petitioner was called upon to pre-deposit a sum of Rs.66,62,032/- along with the interest as applicable. 3. At the hearing of the petition, on behalf of the petitioner their learned counsel draws our attention to para 6 of the order of the Tribunal wherein it is noted that the amount of Rs.33,17,170/- was deposited towards duty. The balance is towards the interest. It is submitted that considering the provisions of section 11B(2) proviso (c) of the Customs Act, the doctrine of unjust enrichment would not apply. It is also pointed out that the said section refers only to the refund of duty and not the interest. In other words, it is submitted that the interest paid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit of duty demanded or penalty levied on the goods, undue hardship may be occasioned to such person, the Appellate Authority may dispense with such deposit subject to such conditions as it may deem fit to impose as to safeguard the interest of the revenue. This had come up for consideration in a large number of judgments. We may only refer to the judgment in the case of Benara Valves Ltd. v. Commissioner of Central Excise, 2006 (204) E.L.T. 513 (S.C.) = 2008 (12) S.T.R. 104 (S.C.) and gainfully reproduce the following paragraphs: "8 It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee relating to undue hardship and also to stipulate condition as required to safeguard the interest of revenue." 8. This view thereafter has been reiterated in Pennar Industries Ltd. v. State of Andrha Pradesh Ors. (2009) (3) SCC 177, in Ravi Gupta v. Commissioner of Sales Tax - 2009 (237) E.L.T. 3 (S.C.), in Manotosh Saha v. Special Director, Enforcement Directorate, 2008 (229) E.L.T. 492 (S.C.) as also in Indu Nissan Oxo Chemicals India Ltd. v. Union of India, 2008 (221) E.L.T. 7 (S.C.). 9. In B.M. Malani v. Commissioner of Income Tax, (2008) 306 ITR 196 (S.C.), the Supreme Court in a case under the I.T. Act observed as under: "Computation to pay any unjust dues per se would cause hardship." After saying so the Court observed that in such cases the question would arise as to whether the default in payment of the amount was due to circumstances beyond the control of the assessee. Then considering the concept of what can be "genuine hardship", the court observed as under: "The term 'genuine' as per the New Collins Concise English Dictionary is defined as under: 'Genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse) For interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India, 1998 (103) E.L.T. 5 (S.C.), where the Supreme Court was pleased to observe that in considering an application for stay the fact an industry has been declared sick by the BIFR would be relevant relevant. In Vijay Packaging System Ltd. v. Commissioner of Customs Central Excise, 2000 (118) E.L.T. 553 (S.C.), in a matter arising under the Central Excise Act, the Supreme Court was again pleased to hold that where the appellant was before the BIFR, the appeal could be heard without calling on the assessee to pre-deposit. 11. We may also consider the judgment in Vijay Prakash Mehta v. Collector of Customs, 1989 (39) E.L.T. 178 (S.C.), where the Supreme Court was pleased to observe that a right to appeal is a statutory right and considering Section 129E of the Customs Act, there was discretion in the authority to dispense with the application of pre-deposit in case of undue hardship. The Court then observed that the discretion must be exercised on relevant materials, honesty, bona fide and objectively. 12. While considering undue hardship, balance-sheet of a company or of an individual may be one of the relevant factors. However, at the same time, the Courts cannot be obliviou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was remanded back with a direction to the authority to consider the petitioner's application for refund as also the show cause notice. Learned counsel for the petitioner points out that instead of one authority hearing both the issues, the matter pertaining to unjust enrichment was heard by the Assistant Commissioner who rejected the claim of the petitioner. The issue pertaining to the show cause notice was heard by the Commissioner who by his order directed payment of duty along with interest and penalty. Ultimately, the matter has reached the Tribunal where the petitioner applied for stay in which the impugned order came to be passed directing the petitioner to deposit. 16. In the instant case, considering the provisions earlier referred to, it would be clear that the doctrine of unjust enrichment would not be applicable. Prima facie, it is a case of refund of duty. Similarly insofar as the interest is concerned, looking at the language of Section 11B proviso, interest paid by the petitioner could not be the subject matter of unjust enrichment. 17. In these circumstances, in our opinion, the petitioner having made out a strong prima facie case, calling upon the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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