Waiver of Pre-deposit of amount demanded for admitting Appeal

PJ/Case Laws/2011-12/1257

Case: Sangfroid Remedies Ltd versus Union of India

Citation: 1998 (103) ELT 5 (SC)

Issue:- Pre-deposit – whether can be waived when contention no opportunity of hearing given raised & unit declared Sick by BIFR?

Brief Facts:- The involved in the case was regarding the classification of “Shower to Shower” prickly heat powder. In appeal before the 2nd respondent with a prayer to dispense with the pre-deposit as laid down under Section 35F of the Central Excise Act, the appellant was directed by order to pay the full excise duty for hearing the appeal.

Aggrieved by the order of the 2nd respondent, theappellant moved the High Court under Article 226 of the Constitution. The High Court reduced the amount to be paid for hearing the appeal and directed the appellant by the order under appeal to pay Rs. 1.25 crores and give bank guarantee for another sum of Rs. 2 crores.

In these circumstances, the appellant has filed this appeal before the Supreme Court.

Appellant’s Contention:- The grievance of the appellant is that the 3rd respondent before passing the impugned order rejecting the claim of the appellant that the product “Shower to Shower” prickly heat powder falls under the Chapter Heading 33.03 and holding the same falls under 33.04 and levying excise duty of Rs. 5.18 crores, has not given any opportunity to substantiate its claim and no notice was served on them by the third respondent before passing the impugned order. Therefore, according to the appellant, the order passed was an ex parte one.

Reasoning of the Judgment:- The Supreme Court held that in view of the objection/contention raised throughout by the appellant that no notice was served on them and no opportunity given before passing the impugned assessment order by the 3rd respondent, which fact has not been disputed before the Supreme Court, the Supreme Court considers that insisting upon the payment of the duty determined, cannot be upheld.

Further, there is one other factor in this case and that is the appellant has since been declared as a sick industry by an order dated 23rd April, 1998 by the Board for Industrial and Financial Reconstruction.

In these circumstances, directing the appellant to pay the excise duty as determined as a condition for hearing the appeal is not sustainable. Impugned order set aside.

Decision:- Appeal allowed.

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PJ/Case Laws/2011-12/1257

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