PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH. *** CWP No. 9053 of 2009. Date of Decision: 21.10.2009. *** M/S BSM Knit Feb. Limited Versus Union of India and others. *** CORAM: Hon'ble Mr. Justice T.S.Thakur, Chief Justice and Hon'ble Mr. Justice Mahesh Grover. *** Present: Shri Jagmohan Bansal, Advocate, for the petitioner. Shri H.P.S.Ghuman, Advocate, for the respondents. *** T.S.Thakur, CJ (Oral) This writ petition calls in question order dated May 05, 2009 passed by Customs,Excise and Service Tax Appellate Tribunal, New Delhi dismissing the application filed by the petitioner for waiver of pre-deposit. The controversy arises in the following back ground:- The petitioner company was registered as a 100% Export Oriented Unit with the Central Excise Department for manufacturing of knitted cotton and cotton fabrics. Alleging failure on the part of unit to discharge its export obligation, the Commissioner of Central Excise issued a notice to the petitioner-company to show cause why a sum of Rs.3,82,98,572/- be not recovered from it towards Customs Duty on the import of capital goods, apart from a sum of Rs.13,14,459/- towards Central Excise Duty and penalty of Rs. 1314459/-. The petitioner submitted a reply to the said notice and urged several contentions including the contention that the demand for payment of duty was barred by limitation. The reply filed by the petitioner was considered by the Commissioner and the objections raised against the demand rejected in terms of a detailed order passed by the latter determining the amount of custom duty recoverable from the petitioner at Rs.3,82,98,572/- and confirming the demand made in the show cause notice. Aggrieved by the said order, the petitioner has preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. Along with the appeal, the petitioner has also filed an application under Section 129 E of the Customs Act, 1962 read with Section 35F of the Central Excise Act, 1944 seeking waiver of pre-deposit of the amount of duty held payable by the petitioner as also the amount of penalty imposed upon it. The Tribunal has by its order dated May 05, 2009 dismissed the said application and directed pre-deposit of the entire amount of duty and penalty. The present writ petition, as CWP No. 9053 of 2009. already noticed above, calls in question the correctness of the said order. We have heard Mr. Bansal, learned counsel appearing for the petitioner and Mr. HPS Ghuman, Advocate for the respondents at considerable length. We have also gone through the order passed by the adjudicating authority and the averments made in the writ petition as also the reply filed on behalf of the respondents. Apart from the ground of limitation urged before the Commissioner, and the Appellate Tribunal, the petitioner has relied upon its weak financial position as a ground for waiver of the pre-deposit . In para No.6 of the application seeking waiver of pre-deposit, the petitioner had made the following averments regarding its financial position in an attempt to prove that the pre-deposit of entire amount of duty and penalty would cause extreme hardship to the petitioner. ''That the applicant could not run its unit because of dispute with the bankers. The bankers have taken over physical possession of the Unit under Securitization Act so at present Unit is under the custody of banker. The applicant had only one unit which as stated has already been taken over by bank. Therefore, the applicant has neither any plant and machinery nor any building nor any other source to make the payment of duty or penalty as pre-deposit.'' The Tribunal has examined the above averments and come to the conclusion that the petitioner was unable to provide any kind of security for safeguarding the interest of the revenue. It noted that the machinery which the petitioner had imported for setting up of unit has also been taken over by the Bank from whom the petitioner had taken a loan. The Tribunal observed:- '' We have inquired from the learned Advocate that how his client is prepared to safeguard interest of Revenue in view of the scenario he had depicted before us as well as by revenue. His answer is that the machinery is in the custody of the bank and Revenue can have negotiation with that bank. We are not satisfied with such an answer when already lien of bank exists on the plant and machinery. At the prima facie stage, we are satisfied that the Custom authorities are notified to be Excise authorities also for the effective implementation of both the laws. However, this aspect shall be gone into detail in the course of appeal hearing when the Appellant has raised issue if bar of jurisdiction. Except the financial hardships claimed, there is nothing coming out from the applicant to protect interest of Revenue at the interim stage.'' Before us also it was very fairly conceded by Mr. Bansal that the unit was CWP No. 9053 of 2009. literally non-existence at present and the financing bank had already invoked the provisions of Securitization Act and taken over all the assets owned by the petitioner company for recovery of outstanding amount. In that view therefore the Tribunal was in our opinion justified in holding that the present was not a fit case in which pre-deposit of the amount of duty and penalty could be waived either in whole or in part. We may hasten to add that we are not touching upon the merits of the submissions which Mr. Bansal advanced on the ground of limitation and the quantum of amount of duty determined against the petitioner for expression of any opinion by us on those aspects is likely to prejudicially affect one part or the other at the hearing of appeal, if the petitioner does eventually make the deposit in terms of the provisions of law and directions issued by the Tribunal. In the result, this writ petition fails and is hereby dismissed but in the circumstances without any order as to costs. (T.S.Thakur) Chief Justice (Mahesh Grover) October 21, 2009 Judge Malik