TMI Blog2005 (9) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise its powers as its sweet will, pleasure and whim or fancy, for the reason that if any authority is permitted to act as it wants to, it will reduce the legislative will to a mere dead letter at the whim of such an authority. A provision of appeal is a substantive right which is a statutory creation in the wisdom of the Legislature and it can also impose condition precedent, like pre-deposit for the purposes of hearing appeal. Courts should not interfere but must ensure strict compliance of the statutory provisions but if the Legislature, in its wisdom, while imposing conditions confers power to waive one or all such conditions like pre-deposit in certain condition/situations the concerned Authority is under a statutory obligation and bound to examine whether the relevant conditions are fulfilled or not so as to dispense with or waive the condition of pre-deposit - There is no doubt that when Legislature provides enabling or discretionary power upon a public authority, even though the words are permissive in character, the concerned authority is required to exercise that power reasonably on relevant considerations and not in a arbitrary or mala fide manner particularly when s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sides on this issue. Though they have prayed to dispense with pre-deposit of Service Tax, interest and penalties on the ground of financial hardship but no documentary proof has been submitted in support of the same. However, in the interest of justice the Appellants are directed to deposit the amount equivalent to demand of Service Tax, Rs. 15,13,017/- only. I stay the operation of the impugned order in original for rest of the amount. The said amount of Rs. 15,13,017/- should be deposited within three weeks from the date of receipt of this order and proof regarding the deposit of the same duly verified by the jurisdictional Officer must be produced to this office. Failing which the appeal may be dismissed without any further reference." 4.The petitioner being aggrieved by the aforesaid impugned order has come up before this Court contending that the Appellate Authority has failed to discharge its statutory obligations inasmuch as it has ignored the relevant circumstances and the decisions of various High Courts (including this Court) and that of the Apex Court which provide that in case of strong prima facie case the Appellate Authority must exercise its power of dispensing wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant and against the Department. No hardship would be caused to the Department in case the present Application is allowed as prayed for and on the contrary in case the relief as prayed is not granted to the Appellant, the letter will face irreparable loss and injury." 6.Learned Counsel appearing for the Revenue has failed to point out any reference in the impugned order to the averments and the documents made in the afore-quoted paragraphs 6 and 7. To this extent we find that Appellate Authority has failed to take notice of the necessary circumstances and the documents filed as annexures-A, B and C (referred to in afore-quoted paragraphs 6 and 7) while considering the question of dispensation of the condition of pre-deposit. The learned Counsel for the petitioner, in order to reinforce his contention for complete waiver of the condition of pre-deposit, submitted that the Appellate Authority having found that appeal before the said Authority was "an arguable case", it prima facie indicates that the appellant had a strong prima facie case. Reliance has been placed upon the case of Bongaigaon Refinery Petrochem Ltd. v. Collector of Central Excise (A), 1994 (69) E.L.T. 193 (Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spensed with. In case two views are possible on interpretation, based on conflicting judgments of the Tribunal or different High Courts in the absence of the judgment of the jurisdictional High Court then the authorities may pass the order under proviso to Section 35F of the Act keeping in view the facts of the case in hand." 9.In Hoogly Mills Co. Ltd. v. Union of India, 1999 (108) E.L.T. 637 the Calcutta High Court again reiterated the view that if the appellant has a strong prima facie case, he is entitled for waiving of the pre-deposit condition and in case the Appellate Authority insists for deposit of the amount so assessed or penalty so levied, it will cause undue hardship to the assessee. While considering the said case, the Court placed reliance upon the large number of judgments including Tata Iron Steel Co. Ltd. v. Commissioner (Appeals), Central Excise, 1998 (98) E.L.T. 350; Hari Fertilizer v. Union of India, 1985 (22) E.L.T. 301 (All.); Re. American Refrigeration Co. Ltd., 1986 (23) E.L.T. 74; and V.I.T. Sea Foods v. Collector of Customs, 1989 (42) E.L.T. 220 (Ker.), wherein the Courts had expressed the similar view. 10.In J.N. Chemicals Pvt. Ltd. v. CEGAT, 1991 (53) E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court considered the case of dispensation of pre-deposit condition and held that the Appellate Authority must address to itself to the prima facie merits of the appellant's case and upon being satisfied of the same, determine the quantum of deposit taking into consideration the financial hardship and other such related factors. 15.In Sri Krishna v. Union of India, 1998 (104) E.L.T. 325 (Del.) the Delhi High Court observed thus :- "Suffice it to observe that while disposing of an application under section 129 of the Customs Act, 1962 the Tribunal is obliged to adhere to the question of undue hardship. The order of the Tribunal should show if the pleas raised before it, it have any merit prima facie or not. If the appellant has such a prima facie strong case as is most likely to exonerate him from payment and still the Tribunal insists on the deposit of the amount it would amount to undue hardship." 16.In Delhi Administration v. Manohar Lal, (2002) 7 SCC 222, the Supreme Court held that power vested by Statute in a public authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest and no authority including the appropriate Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference may be made in the cases of Julius v. Lord Bishop of Oxford, (1880) 5 Appeal Cases 214; Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16; K.S. Srinivasan v. Union of India Ors., AIR 1958 SC 419; Yogeshwar Jaiswal v. State Transport Appellate Tribunal, AIR 1985 SC 516; Ambica Quarry Works etc. v. State of Gujarat Ors., AIR 1987 SC 1073. 19.In view of the observations made by this Court in the case of Mehsana District Cooperative Milk P.U. Ltd. (supra) it is clear that the Appellate Authority should not grant interim relief/stay of the recovery merely on the asking of the appellant. The Appellate Authority has to maintain a balance between the rights of the individuals and the revenue so far as the recovery of sovereign dues is concerned. While considering the application for stay/waiver of a pre-deposit, as contemplated in relevant provisions, the Appellate Authority has to apply its mind as to whether the appellant has a strong prima facie case (i.e. arguable case) on merit. It may be clarified that when the Appellate Authority feels that there is a binding decision of the Supreme Court or High Court or a Tribunal or the like and there are fairly good cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion the precedent laid down by this Court in Civil Misc. Writ Petition No. 1219 of 2003, I.T.C Ltd. v. Commissioner (Appeals), Customs Central Excise and others, decided on 23-10-2003 [2005 (184) E.L.T. 347 (All.)], wherein this Court has held as under : - "In view of the above, the aforesaid authorities make it clear that the Court should not grant interim/relief stay of the recovery merely asking of a party. It has to maintain a balance between the rights of an individual and the State so far as the recovery of sovereign dues is concerned. While considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must apply its mind as to whether the appellant has a strong prima facie case on merit. In case it is covered by the judgment of a Court/Tribunal binding upon the Appellate Authority, it should apply its mind as to whether in view of the said judgment, the appellant is likely to succeed on merit. If an appellant having strong prima facie case, is asked to deposit the amount of assessment so made or penalty so levied, it would cause undue hardship to him, though there may be no financial restrain on the appellant running in a good financial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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