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TMI Blog1999 (4) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... stockist arrangement. It is the further case of each of the petitioners that in the year 1994-95 the respondent No. 7 Bata India Ltd. entered into an arrangement with the writ petitioner company by placing its purchase orders time to time for supply of different categories of chappals strictly according to the Bata's specifications and designs. The arrangement for such sale to Bata India Ltd. is according to a normal business transaction with principal to principal basis which stipulates, inter alia that the goods manufactured should be strictly according to the specification and the sample provided to the petitioner by the said Bata India Ltd; the purchaser Bata India Ltd. shall have the right to reject the whole or part of the goods if the same are found on inspection to be defective or not according to the specification and in such event the Bata India Ltd. shall have the right to treat the seller i.e. the petitioner as being in breach of contract holding responsible for compensation. It is the further case of the petitioner under such agreement the petitioner company at the time of delivery has to emboss the brand name of "Bata" upon each of the items; the purchase price and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Central Excise duty by not calculating the value of the goods on the basis of the wholesale price of Bata India Ltd. 3.Each of the petitioners submitted its reply to the said show cause notices explaining the aforesaid agreement with the Bata India Ltd. in which all the manufacturer of the chappals embossing the trade name of Bata they are selling the same to Bata India Ltd. as per their specification and contending, inter alia, that because of the same the wholesale price charged by the petitioner from Bata India Ltd. and the purchase price of Bata India Ltd. from the petitioner would be the correct basis for levy of the excise duty. 4.The Respondent No. 3 considering such reply and after personal hearing, however, confirmed the total demand of the excise department for the differential duty amount charged against each of the petitioners and also imposed a penalty of Rs. 5000/- holding, inter alia, that the price by which the petitioner sells its goods to M/s. Bata India Ltd. is a favoured price and allegedly has been motivated for extra commercial consideration and did not reflect the fair and reasonable price. 5.Against the aforesaid order, each of the petitioners prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue." 12.It is now well settled by judicial precedence that while considering the question of dispensation of provisions of pre-deposit under Section 35(F) of the Central Excise Act 1944, while forming the requisite opinion as to whether such deposit would cause undue hardship to the appellant, whether the appellant has got a good prima facie case is a relevant factor to be taken into consideration. It is not in doubt any further that the expression "undue hardship" as used in the aforesaid section will cover a case where the appellant has a strong prima facie case. 13.If an appellant can establish before the Commissioner of Appeals or before the tribunal, as the case may be that he has got a strong prima facie case, in such event the same itself independent of other factors would come within the relevant consideration for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Central Excise, Calcutta (II) reported in 1998 (104) E.L.T. 330 (Calcutta) and in case of Exide Industries Ltd. v. Commissioner of Central Excise (Calcutta II) (W.P. 932 of 1998 unreported). 17.If the impugned order is examined in the light of the above-mentioned settled proposition of law, it will appear that there has been no proper application of mind by the appellate authority on the question whether because of such pre-deposit undue hardship would be caused to the petitioner and therefore, the same cannot be sustained. 18.It has been submitted by the ld. Counsel appearing for the revenue that the legislature in its wisdom having made a provision for deposit of the amount assessed by the appropriate authority whether by way of penalty or otherwise while preferring an appeal against such order the same cannot be lightly interfered with by the High Court and under Section 35F whether exemption of such pre-deposit will be granted or not really being a matter for discretion for the appellate authority there should not be any interference with such discretion. 19.While grant of exemption from pre-deposit under Section 35F of the Central Excise Act may be a discretion for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations. The amount involved is also a relevant factor. If it is a heavy amount, it should be presumed that immediate payment, pending an appeal in which there may be a reasonable chance of success, would constitute a hardship. The Wealth Tax Act has just come into operation. If any point is involved which requires an authoritative decision, that is to say, a precedent, that is a point in favour of granting a stay. Quick realisation of tax may be an administrative expediency, but by itself it constitutes no ground for refusing a stay. While determining such an application, the authority exercising discretion should not act in the role of a mere tax-gatherer." 21.In my view, the principles laid down in the aforesaid case will very much be applicable in the instant case also. 22.The aforesaid decision in the Aluminium Corporation of India Ltd. v. C. Balakrishnan (supra) was followed by the Mysore High Court in the case of Bibi Plantation v. Agricultural Income Tax Officer, reported in 1967 Income Tax Report, Volume 65 Page 341 where the Mysore High Court was considering the proviso to Section 41 of the Mysore Agricultural Income Tax Act, 1957 which stated, inter alia, that when an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice as per their specification and in all such cases the contract price and not the price of which the branded goods are sold by the owners of the brand name has been accepted by the assessable value. 28.It also appears, the appellants in the said memorandum of appeal has referred to a number of Supreme Court decisions where the Supreme Court under similar circumstances held that the wholesale price of the goods manufactured by the seller is a wholesale price at which it sells these goods to the buyer which is the brand name owner and it is not the wholesale price at which the the brand name owner sells its goods to others. 29.It appears to this court that the appellant has referred to a number of decisions of the Supreme Court in the case of reported in 1985 (22) E.L.T. 302 (S.C.) = 1985 ECR 2005 (S.C.); 1985 (22) E.L.T. 324 = 1985 ECR - 2186 (S.C.); 1986 (26) E.L.T. 881 (S.C.); 1990 (45) E.L.T. 546 (Cal.). 30.It appears from the impugned order that the appellate authority did not choose to apply his mind at all to such decisions of the Supreme Court. 31.After considering such decision cited by the appellant before the appellate authority, there cannot be any doubt that the a ..... 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