1 abs IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 8187 OF 2009 M/s Eco Valley Farms & Foods Ltd. .. Petitioners V/s Union of India & Ors. .. Respondents Mr. V. Sreedharan with Mr. T. Viswanathan i/b PDS Legal for the petitioners. Mr. P.S. Jetly with Mr. Rohit Pardeshi for the respondents. CORAM : F.I. REBELLO & D.G. KARNIK, JJ. DATE : 14TH OCTOBER 2009 P.C. : 1. Rule. Heard forthwith. 2. Learned counsel for the parties addressed us at length on various issues. The matter has come before us against an order of pre-deposit. It is in that context that we propose to decide the controversy considering that the Tribunal at that stage has to consider the issue of prima facie case and hardship. 3. At the hearing of this petition, on behalf of the petitioners their learned counsel submits that previous to 1st December 2006 no duty was 2 demanded from the petitioners. It is further set out that on 22nd June 2008 the petitioners had withdrawn from EOU status. If the petitioners were aware that they would not be given the benefit of the order in their favour, they would have sought to withdraw from the status from 1st December 2006. This point was raised before the Tribunal but we find that it has not been answered by the Tribunal. In our opinion, this would be relevant for the purpose of considering whether the hardship exists. 4. Another aspect of the matter is that the learned counsel relying on section 3 and the proviso to the Central Excise Act, 1944 submits that if duty is not payable under section 3, then by virtue of the proviso no duty can be demanded and it is not possible hold that duty is paid. This point was not raised before the Tribunal. However, this question being purely a question of law will required to be answered. 5. The Tribunal has dealt with the issue of hardship in paragraph 10 of its order. The Tribunal has clearly proceeded on the basis of the net profit shown in the profits and loss account for the assessment year 2006-07 where the income was assessed at Rs.14,38,61,727/-. The Tribunal also notes that the sales for the year ended 31st March 2007 would be Rs.9,07,04,391/-. The petitioners have pointed out that there were huge losses right from the period 1998-99. The Tribunal has clearly proceeded on the footing of profits 3 and loss account for the assessment year 2006-07 without considering the nature of the income that was received in that year. In our opinion, as the Supreme Court has observed that in India “hardship” means “financial hardship”, the Tribunal should also consider that aspect. While considering the financial hardship, the Tribunal must also bear in mind the state of the economy, namely the liquidity in the market. It is not possible for the Courts to ignore these facts while considering the issue of hardship, more so when the economy is in recession. The Courts cannot close their eyes to the fact that any additional unjust demand or burden may result in effecting production and job losers. These aspects have to be borne in mind while considering the issue of hardship. 6. The petitioner have therefore made out a prima facie case as also the issue of hardship requires reconsideration. 7. For the aforesaid reasons, in our opinion, the impugned order dated 7th August 2008 is liable to be set aside and the matter restored to the file of the Tribunal for rehearing the parties and passing appropriate order in accordance with law. Rule is made absolute accordingly with no order as to costs. 8. During the pendency of the application before the Tribunal, the 4 respondents not to take steps to recover the amount which is the subject matter of the appeal pending before the Tribunal. (D.G. KARNIK, J.) (F.I. REBELLO, J.)