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TMI Blog2013 (12) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... ant herein to deposit a sum of ₹ 4,00,000/- in cash as pre-deposit under 35F of the Central Excise Act, 1944. The above pre-deposit order was challenged before the learned Single Judge on the ground that the writ petitioner, in their capacity as sub-contractor, need not remit service tax and the first respondent being the Appellate Authority ought to have granted full waiver of pre-deposit by considering the said fact. Further, it was contended that such direction to make pre-deposit amounts to double taxation when the tax liability stands discharged by the main Contractor. The writ petitioner also stated that the order of pre-deposit would cause undue hardship to them. 3. The said writ petition was resisted by the respondents h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petition. 6. Per contra, the learned Standing Counsel appearing for the respondents submitted that there was absolutely no pleading in the waiver application with regard to the undue hardship as claimed by the appellant herein. Therefore, the Appellate Authority cannot be found fault with in not making any finding on the same. The learned Standing Counsel further submitted that only a sum of ₹ 4,00,000/- was directed to be deposited as against the duty demand of ₹ 47,93,469/-, which is less than 10% of the total demand. Thus, by exercising the discretion vested under Section 35F of the Central Excise Act, the Appellate Authority has taken a lenient view, which does not warrant any interference in this appeal. In support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al hardship would be caused to them. Equally, except saying that they have got a prima facie strong case on merits, the appellant has not furnished any other details. 10. The First Appellate Authority viz., the first respondent herein after considering the application filed by the appellant seeking for waiver of pre-deposit, found that the issue involved in this case was not beyond the doubt and the appellant's arguments need careful consideration. Accordingly, he ordered pre-deposit of ₹ 4,00,000/- to be paid on or before 12-1-2013 under Section 35F of the Central Excise Act, as against the demand of ₹ 47,93,469/-. 11. It is the contention of the appellant before us that neither the First Appellate Authority nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka and Ors. (AIR 1994 SC 923) that under Indian conditions expression "Undue hardship" is normally related to economic hardship "Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be 'undue' it must be shown that the particular burden to have to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word "undu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards undue hardship, a proposition has been laid down by the Supreme Court in a number of decisions. A Division Bench of this Court, on an earlier occasion, considered two of the decisions of the Supreme Court, namely (i) S. Vasudeva v. State of Karnataka & Ors., AIR 1994 S.C. 923 and (ii) M/s. Benara Valves Ltd. & Ors. v. Commissioner of Central Excise & Anr., 2006 (204) E.L.T. 513 (S.C.) = 2006 (12) SCALE 303, in an unreported judgment, dated 8-1-2008, passed in W.A. Nos. 1138 to 1144 of 2007. In S. Vasudeva's case, the Supreme Court held that the expression "undue hardship" is normally related to economic hardship. "Undue" means something, which is not merited by coduct of the claimant or is very much disproportionate to it. Undue ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., undue hardship and safeguarding the interest of the revenue. In this case, the appellant failed to make a plea with proper materials and establish the undue hardship, before the First Appellate Authority. On the other hand, as against the demand of ₹ 47,93,469/-, the First Appellate Authority has directed the appellant to deposit only a sum of ₹ 4,00,000/-, which in our considered view, is an order passed with at most lenient view. Section 35F of the Central Excise Act makes it mandatory on the appellant to make deposit of the duty demanded or the penalty levied while filing the appeal before the Appellate Authority. First Proviso to Section 35F empowers the Appellate Authorities to dispense with such deposit subject to s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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