Jindal Sanitary Works vs Commissioner (Appeals) Central Excise

Madan B. Lokur, J.—The Additional Commissioner of Central Excise, New Delhi passed an adjudication order dated 18th October 2004 against the Petitioner in which he demanded central excise duty of Rs. 28,09,185/- u/s 11A of the Central Excise Act, 1944 (the Act) along with interest thereon u/s 11B of the Act. The Petitioner was also saddled with penalty of Rs. 28,09,185/- u/s 11AC of the Act.

From the above amounts demanded, a sum of Rs. 5,00,000/- earlier deposited by the Petitioner with the Revenue was appropriated. Further, goods worth Rs. 13,12,200/- were seized and confiscated with an option to the Petitioner to redeem the same on payment of Rs. 1,00,000/-. Learned counsel for the Petitioner informs us that his client has not yet redeemed the goods.

Feeling aggrieved by the order passed by the Additional Commissioner, the Petitioner filed an appeal before the Commissioner (Appeals), Central Excise, Delhi-1. Along with the appeal, the Petitioner also filed an application for waiver of the condition of pre-deposit u/s 35F of the Act.

While disposing of the application for waiver of pre-deposit by her order dated 28th February 2005, the Commissioner (Appeals) held that the Petitioner was not entitled to full waiver of pre-deposit. Consequently, she directed them to deposit Rs. 9,00,000/- as a pre-condition for hearing the appeal. Feeling aggrieved, the Petitioner has preferred the present writ petition seeking a complete waiver of pre-deposit.

Having heard learned counsel for the Petitioner, we are of the view that is would not be appropriate to delve into the merits of the case, lest it prejudice either of the parties. However, it does appear to us that the Commissioner (Appeals) overlooked that an amount of Rs. 5,00,000/- is already available with the Revenue and that this amount could have been adjusted against the demand for pre-deposit, which has not been done.

Consequently, while maintaining the condition of pre-deposit of Rs. 9,00,000/- as directed by the Commissioner (Appeals) we modify the impugned order to the extent that the amount of Rs. 5,00,000/- already lying deposited with the Revenue be adjusted against that amount. In effect, Therefore, the Petitioner will have to now deposit a further amount of Rs. 4,00,000/- as a pre-condition for hearing of its appeal. This amount should be deposited by the Petitioner on or before 30th April 2005.

In addition to the above, we accept the statement of learned counsel for the Petitioner that the redeemable goods worth Rs. 13,12,200/- will not be redeemed by his client till the disposal of the appeal by the Commissioner (Appeals). We are of the view that this will adequately safeguard the interests of the Revenue.

The writ petition is disposed of in terms of the above. No costs.