IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER TUESDAY, THE 15TH JULY 2008 / 24TH ASHADHA 1930 W.A.No. 1407 of 2008 ------------------------------------ AGAINST THE JUDGEMENT IN WPC.15193/2008 DATED 03/06/2008 .................... APPELLANT/PETITIONER: ------------------------------------- INDIA VISION SATELLITE COMMUNICATIONS LTD., 32/17897, 6TH FLOOR, TUTTUS TOWERS, N.H.BYE -PASS ROAD, KOCHI-682024. REPRESENTED BY ITS RESIDENT DIRECTOR, JAMALUDHEEN FAROOQUE BY ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.ANIL D. NAIR RESPONDENTS/RESPONDENTS: ----------------------------------------------- 1. THE UNION OF INDIA, REPRESENTED BY SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI-110 001 2. THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, C.R.BUILDING, I.S.PRESS ROAD COCHIN-682018. 3. THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS,(APPEALS), CR BUILDING, I..S.PRESS ROAD COCHIN-682018. 4. THE SUPERINTENDENT OF CENTRAL EXCISE, SERVICE TAX D RANGE, CENTRAL EXCISE BHAVAN KATHRIKADAVU, KOCHI-682 017. BY ADV. SRI.P.PARAMESWARAN NAIR, ASST.SOLICITOR GENERAL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 15/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------- W.A.No.1407 of 2008 ------------------------------------------ Dated, this the 15th day of July, 2008 JUDGMENT H.L.Dattu, C.J. Though the matter is listed for admission, by consent of the learned counsels appearing for the parties to the lis, the matter is taken up for final hearing. 2. The appellant/petitioner being aggrieved by the orders passed by the Additional Commissioner of Central Excise, Cochin, has filed the statutory appeal before the first appellate authority. Along with the appeal the petitioner has also filed an application for waiver of the pre- deposit. That application is rejected by the first appellate authority by his order dated 12.5.2008. The operative portion of the order passed by the first appellate authority reads as under: “I have carefully gone through the records of the case. Stay application has to be disposed of in terms of Hon'ble Supreme Court judgments in UOI V. Adani Exports 2007 (218) ELT 164 (SC) and Benara Vs. CCE 2006 (204) ELT 513 (SC). The factual scenario in a particular case has to be considered to determine whether there will be undue or excessive hardships, W.A.No.1407 of 2008 2 whether there is a prima-facie case, whether there will be irreparable loss and final whether balance of convenience lies taking into consideration the requirement of safeguarding revenue interest. Considering all these factors, in this case, I find that the lapses have been claimed to be procedural and I am of the view that justice will be served by deposit of 50% of the tax confirmed within fifteen days on receipt of this order. On payment of the pre-deposit, the recovery of balance amount demanded from them as per the impugned order shall remain stayed till disposal of the appeal on merit in due course The proof of pre-deposit shall be produced before the undersigned by the 10th of June 2008.” 3. Aggrieved by the said order passed by the first appellate authority on the application filed for waiver of pre-deposit, the petitioner was before this Court in W.P.(C) No.15193 of 2008. The learned Single Judge has rejected the writ petition by his order dated 3rd June, 2008. That is how the petitioner in the writ petition is before us in this writ appeal. 4. Sri.Jayasankar, learned counsel appearing for the appellant/petitioner would submit, that, while considering his application W.A.No.1407 of 2008 3 for waiver of pre-deposit it is expected of the first appellate authority to consider the financial hardships pleaded by the appellant/petitioner. 5. When the matter had been posted before us on the last date of hearing, we had directed Sri.Jayasankar, learned counsel appearing for the appellant/petitioner, to substantiate his contention that he in fact pleaded his financial difficulties before the first appellate authority. 6. Pursuant to the direction so issued by us, Sri.Jayasankar has filed a personal affidavit of his before this Court. In that it is stated that at the time of hearing of the application for waiver of pre-deposit, the petitioner had handed over copy of the documents showing the financial position of the appellant by producing the annual report with audited balance sheet and profit and loss account as on 31st March, 2007 and the un-audited balance sheet and profit and loss account of the appellant company for the year ended on 31st March, 2008. He has also stated that the documents so produced by the appellant/petitioner would clearly show that the total accumulated loss of the company for the year ended on 31.3.2007 was Rs.27,64,23,296.40 and the loss for the year 2007-08 was Rs.1,61,15,123.30. 7. At the outset, we would like to state, that, we do not doubt the correctness or otherwise of the affidavit filed by a responsible learned W.A.No.1407 of 2008 4 counsel. 8. While considering the application for waiver of pre-deposit, one of the requirement is, that the appellate authority has to take into consideration the financial hardships that the petitioner may plead before him. It is only after consideration of the financial hardships so pleaded, the first appellate authority is expected to pass appropriate orders on the application filed for waiver of pre-deposit. 9. In the instant case, we have carefully perused the orders passed by the first appellate authority. The first appellate authority nowhere in the order has stated about the financial hardships that was pleaded by the petitioner at the time of hearing of the application for waiver of pre-deposit. The order passed by the first appellate authority is contrary to the settled legal principles and also the observations made by the apex Court in more or less similar cases. In that view of the matter, it is difficult for us to sustain the orders passed by the first appellate authority in rejecting the application filed by the appellant/petitioner for waiver of pre-deposit. 10. Accordingly, we pass the following: ORDER i) Writ appeal is disposed of. W.A.No.1407 of 2008 5 ii) The orders passed by the learned Single Judge and the orders passed by the first appellate authority are set aside. iii) The matter is now remanded back to the first appellate authority to consider the application filed by the appellant/petitioner for waiver of pre-deposit taking into consideration the documents produced by the appellant/petitioner. iv) Liberty is also given to the appellant/petitioner to produce such other documents which are available in his possession to prove his financial hardships before the first appellate authority. With these observations and directions the writ appeal is disposed of. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE vns/dk