Medopharam Pharmaceuticals vs Asstt. Commr. of C. Ex., Madras

A.R. Lakshmanan, J.—Heard the counsel for the petitioner. Mr. K. Jayachandran, Additional Central Government Standing Counsel takes

notice. The above writ petitions have been filed to forbear the first respondent from invoking the Central Excise Rule 230 action pursuant to the

notice dated 9-11-1995 for the recovery of the amounts, which are under dispute by way of appeals before the second respondent in A. No.

513/95 and stay petition E. No. 438/95 (W. P. No. 15717/95) and A. No. 512/95 and stay petition E. No. 437/95 (W. P. No. 15718/95).

By consent of both parties, the main writ petitions themselves are disposed of finally. The Assistant Commissioner of Central Excise, Madras IV

Division, while construing the claim of benefits of exemption Notification 175/86 took the view that the factory owner and the loan licensees are

manufacturers and as per paragraph 3 of the Notification No. 175/86, the value of clearance of all the units have to be clubbed and on clubbing,

the value exceeds the limit prescribed in the notification and hence, both the factory owner and the loan licensee are not entitled to the benefit of the

Notification No. 175/86 and hence passed the adjudication order on 31-1-1995. Against this order, appeals were preferred both by the factory

owner and the loan licensee, which were rejected by the Collector of Central Excise (Appeals) by common order dated 31-5-1995 in Application

Nos. 151 to 158 of 1995. The Appellate Authority accepted the contention that the licensees are independent units but when it comes to the

benefits under the Notification of 175/86, the Authority held that the value of clearance of both the factory owner and the loan licensee has to be

clubbed and if the value exceeds the prescribed limit, then both the factory owner and the loan licensee are not entitled to the benefits. Against the

order passed by the Appellate Authority, both the factory owner and the loan licensee filed appeals before the second respondent and pending

appeals, filed petitions u/s 35-F of Central Excise Act. Originally, the cases were posted to 16-11-1995. It is now stated that the petitioners

received a communication from the Tribunal that these applications have been posted to 29-11-1995. The Assistant Commissioner of Central

Excise, in the meanwhile, insisted payment of the balance amounts, which, according to the petitioners, are under dispute before the Tribunal. It is

stated that on 9-11-1995, the Assistant Commissioner of Central Excise was apprised that the applications have been posted to 29-11-1995 and

orders are awaited. The petitioners also filed a memorandum of representation before the Commissioner of Central Excise, Madras, on 9-11-

1995 narrating the circumstances and prayed for a direction to the Assistant Commissioner of Central Excise, Madras, IV Division, to defer further

action till the Tribunal passes orders on 29-11-1995. However, the Assistant Commissioner of Central Excise issued a letter on 9-11-1995 itself

directing the petitioners to pay the balance amounts immediately failing which Rule 230 proceedings will be initiated. It is also stated in the affidavit

that it was orally informed that factory premises will be locked, if the demand is not complied with, including the attachment of plant and machinery

with stock. The petitioners have therefore filed the above writ petitions seeking redressal of their grievances.

It cannot be disputed that the matter in question relates to interpretation of a beneficial notification, intended for Small Scale Industrial units.

According to the petitioners, they have not collected the excise duty from their customers and it will be difficult for them to collect it at this distance

of time. It cannot be in dispute that when the stay applications and the appeals are pending before the competent Appellate Authority and have

been adjourned by the Tribunal itself for want of time or for non-sitting of Bench, the petitioners cannot be penalised by the Assistant

Commissioner of Central Excise by directing them to pay the balance amounts immediately. I, therefore, direct the second respondent herein, the

Customs, Excise and Gold Control Appellate Tribunal, South Regional Branch, Madras, to dispose of the appeals and the stay petitions within a

period of 30 days from the date of the receipt of the copy of the order from this Court or on proof of the same by the petitioners, whichever is

earlier. Till such time, the Assistant Commissioner of Central Excise, Madras IV Division, shall not insist upon the payment of balance amounts by

the petitioners or take any coercive steps by way of locking the factory premises or attachment of the plant and machinery with the stock. The

Assistant Commissioner of Central Excise shall abide the final orders from the second respondent and proceed further in accordance with the

orders to be passed by the second respondent. The writ petitions are disposed of accordingly.