IN THE HIGH COURT OF JUDICATURE AT PATNA MA No.350 of 2006 1. M/s. Jagdamba ventures (P) Limited, Patliputra Industrial Area, Patna. 2. Shri Shashi Kant Kanoria, Director, M/s. Jagdamba Ventures (P) Limited, PatliputraIndustrial Area, Patna ….Appellants Versus Commissioner of Central Excise, C.R. Building, Birchand patel, Path, Patna-1 Opposite party. ----------- 8 28.6.2010 Heard Mr. Y.V. Giri for the appellants, and Ms. Archana Meenakshi for the respondent. This appeal under section 35 –G of the Central Excise Act (hereinafter referred to as the „Act‟), is directed against the order dated 12.7.2006, passed by the Customs Excise & Service Tax Appellate Tribunal, EZB, in Stay Petiton No. 55/06 (EDM-43/2006), whereby the application of the appellants herein in terms of section 35 –F for exemption from deposit of the statutory amount along with the memorandum of appeal has been rejected, and have been directed to deposit a sum of Rs.20.00 lakh (Rupees Twenty Lakh) as a pre- condition for hearing of the appeal.. 2. By orders of the learned authorities under the Act, the appellants have been directed to deposit Rs.34,56,256.00/-, as well as an equivalent amount by way of personal penalty. The appellants challenged the same by preferring the appeal before the Tribunal. Section 35-F requires the appellants to deposit the amount indicated therein as pre-condition for hearing of the appeal. Section 35-F is reproduced here in below: “35F. Deposit, pending appeal of duty demanded or penalty levied.- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act the person desirous of appealing against such decision or order shall, pending - 2 - the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case the 1[Commissioner ( Appeals)] or, the Appellate Tribunal is of opinion that the deposit of the duty demanded or penalty levied would cause undue hardship to such person, the 1[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 interest of revenue: 2[ Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filling.] 3[Explanation. – For the purposes of this section “duty demanded” shall include, - (i) amount determined under section 11 D; (ii) amount of erroneous CENVAT credit taken; (iii) amount payable under rule 57 CC of Central Excise Rules, 1944; (iv) amount payable under rule 6 of CENVAT Credit Rules, 2001 or CENVAT Credit Rules, 2002 or CENVAT Credit Rules, 2004; (v) interest payable under the provisions of this Act or the rules made thereunder.] 3. The appellants filed an application under section 35-F of the Act before the learned Tribunal , and pleaded that in view of hardship of financial condition they may be required to deposit a sum of Rs.5,00,000/- only as interim measure, which has been rejected by the impugned order. Learned counsel for the appellants raised a grievance that the amount contemplated by section 35-F of the Act can be waived in part or full if the appellants are able to establish that deposit of whole shall result in financial hardship. Learned counsel for the appellants submits that learned Tribunal has not considered this aspect of the matter and has erroneously dismissed the - 3 - application by the impugned order. 4. We have perused the materials on record and considered the submissions of the learned counsel for the parties. The main part of section 35-F enjoins on the appellants to deposit the amount indicated therein. However, the first proviso thereto provides that the Tribunal may waive part or whole of the amount, if the appellants are able to make out a case of financial hardship. On a perusal of the impugned order, it appears that the issue for special consideration was raised before the Tribunal. Paragraph 4 of the order of the Tribunal is reproduced herein below : “ At this stage, learned Advocate, Shri P.K. Das submits that according to the calculation done by them, the duty-liability, if at all, would come to an amount of Rs.5.20 lakh (Rupees five lakh twenty thousand) (approx.). He also pleads financial hardships relying upon the Balance Sheet produced by them.” The question has been discussed by the learned Tribunal in paragraph 6 of the order and is reproduced herein below : “ In as much as we have already concluded that there is no prima facie case in favour of the applicants/appellants and in view of the fact that they are indulging in clandestine activities, we direct the applicant/ appellant company, M/s. Jagdamba Ventures to deposit an amount of Rs. 20.00 lakh (Rupees twenty lakh) towards the duty within a period of eight weeks from today, subject to deposit the above amount, the predeposit of the balance amount of duty and the entire amounts of the penalties imposed upon both the applicants/appellants, is dispensed with and its recovery stayed during the pendency of their appeals,. Matters to come up for ascertaining compliance on 19.9.2006.” (emphasis added) 5. It is thus evident on a perusal of the impugned order that the appellants have no prima facie case and are guilty of engaging themselves - 4 - in clandestine activities. No indulgence can be shown to the appellants to waive part or full of the amount required to be deposited in terms of section 35-F of the Act. We entirely agree with the order of the learned Tribunal. Learned counsel for the respondent has rightly relied on the judgment of the Supreme Court in Civil Appeal No. 5795 of 2007 disposed of on 11.12. 2007 reported in 2002 (0) AIJEL-SC 40213 ( (Indu Nissan Oxo Chemicals Ind. Ltd. Versus Union of India) 5. In the result, this appeal is dismissed. In view of the position that the appeal has remained pending in this Court for merely four years, the learned Tribunal will be well-advised to dispose of the main matter pending before it expeditiously. (S.K. Katriar, J) ( Birendra Prasad Verma, J. ) M.Rahman