TMI Blog2006 (2) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... - already deposited by the appellants. The pre-deposit of penalty was waived. The appellants, in their application, have stated that the order directing them to pre-deposit the entire sum of duty has resulted in irreparable financial hardship and the plea as to the financial hardship was not even recorded in the Stay Order of the Tribunal. 2. Shri K.S. Ravi Shankar and Shri N. Anand, the learned Advocates, appeared for the appellants and Shri K.S. Bhatt, the learned SDR for the Revenue. 3. With regard to the financial hardship, the learned Advocate submitted that the net profit for the period from April 2005 to September 2005 is only Rs. 11,47,967/- whereas for the previous financial year 2004-2005, the profit was Rs. 85,09,744/-. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court and the Hon ble Karnataka High Court, in its order dated 13-4-2005 as reported in 2005 (186) E.L.T. 145 (Kar.), held that while examining the stay petition, the Tribunal should consider the financial hardship even if prima facie, the assessee has a case. 6. Our attention was also invited to the following observations of the High Court of Karnataka in the case of Commissioner of Customs v. United Telecom Ltd. [2006 (198) E.L.T. 12 (Kar.)] in para 28, which is extracted herein below :- 28. The phrase undue hardship which occurs in the proviso to Section 129E where the rule is pre-deposit of the amount that is disputed in the appeal, has to receive the meaning in the context in which it occurs viz., in the context of the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is passed only under this proviso and not under any other provision. The impugned order is clearly a violation of the statute, fit to be characterized as arbitrary inasmuch as the Tribunal has not shown its awareness to the aspect of undue hardship if in fact existed or will be caused to the assessee if the assessee has to fulfil the statutory requirement of pre-deposit and not because of the Tribunal directs and therefore calls for interference even in the exercise of jurisdiction under Article 227 of the Constitution of India. 7. In view of the above decisions, it was pleaded that when financial hardship is pleaded, the Tribunal should have considered the same while deciding the petition for stay. In other words, prima facie mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al hardship. 9. It was further pleaded that the appellants have a strong case on account of time bar. 10. The learned SDR strongly opposed the modification petition for the Stay Order. He said that it is not correct to say that the Tribunal has not considered the financial hardship because in para 6 of the Stay Order, the Tribunal has stated that Having regard to the facts and circumstances, payment of Rs. 9,40,20,482/- is ordered, which is only half the amount of the total demand of Rs. 19,05,40,964/- . He also said that the appellants have not made out a strong case for waiver of pre-deposit as observed by the Tribunal in para 2 to 5 of the Stay Order. He also invited our attention to the observations of the Hon ble High Court of Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ends of justice would be met if the appellants are ordered to deposit a sum of Rs. 1,00,00,000/- (Rupees one crore only) instead of Rs. 9,40,20,488/- ordered in the first stay order. In taking this decision, we are faithfully following the ratio of the Hon ble High Court of Karnataka in McDowell case as well as United Telecom case wherein it is held that in deciding stay matters, the financial hardship should be examined even if prima facie, the appellants have strong case on merits. Therefore, the appellants are directed to deposit the above amount within a period of two months and report compliance on 11th May, 2006. The misc. application is disposed of in the above terms. (Pronounced in open Court on 27-2-2006) - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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