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Rashtriya Chemicals and Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(1983)LC501DTri(Mum.)bai
AppellantRashtriya Chemicals and
RespondentCollector of Central Excise
Excerpt:
.....be treated as an appeal filed before the tribunal. he has, therefore, submitted that the present stay application has been properly filed with reference to that appeal. the learned advocate has, further, submitted that the amount of duty demanded exceeds rs. 4 crores and the same has been arrived at on the basis of conjectures.since the basis for making the demand was incorrect and improper, the appellant's first appeal to the appellate collector of central excise was successful to the extent that the original demand for duty made by the asstt. collector was reduced to the extent of about rs. 1 crore.the appellants, therefore, have full confidence that their appeal to the tribunal will succeed. when it was pointed out to the learned advocate that the consideration of the stay petition.....
Judgment:
1. This is a stay petition filed by M/s. Rashtriya Chemicals & Fertilizers Ltd., Bombay for the stay of recovery of duty as demanded in the Order No. V(6) 21-225/70-Pt. 111/1569 dated 19-1-80 of the Asstt. Collector of Central Excise Divn. 'N' Bombay, as modified by the order No. V-2(6) 1079/80 dated 23-12-80 of the Appellate Collector of Central Excise Bombay. Learned Advocate Shri G.R. Gagrat on behalf of the appellants has submitted that the appellants have filed a revision petition dated 19-5-81 to the Government of India under the then Section 36 of the Central Excises & Salt Act, 1944 and this petition has now to be transferred to the Tribunal under Section 35-P{2) ibid and it has to be treated as an appeal filed before the Tribunal. He has, therefore, submitted that the present stay application has been properly filed with reference to that appeal. The Learned Advocate has, further, submitted that the amount of duty demanded exceeds Rs. 4 crores and the same has been arrived at on the basis of conjectures.

Since the basis for making the demand was incorrect and improper, the appellant's first appeal to the Appellate Collector of Central Excise was successful to the extent that the original demand for duty made by the Asstt. Collector was reduced to the extent of about Rs. 1 crore.

The appellants, therefore, have full confidence that their appeal to the Tribunal will succeed. When it was pointed out to the Learned Advocate that the consideration of the stay petition by the Tribunal would not involve their going into the merits of the case, the Advocate has submitted that the stay may be granted on the condition that the appeal is taken up for hearing and decision at an early date and that he will be prepared to argue the matter at short notice. On being asked to state the cash balance, reserves and profits of the Company on the day of the closing of the account, the Advocate and the appellant's representatives have not been able to furnish the required information, but the Advocate has explained that there is no difficulty about the liquidity position of the appellants. Finally, he has prayed that irreparable loss will be done if the stay is not granted. Shri J M.Jain for the department has opposed the grant of stay on the ground that their application for stay was rejected by the Government of India under their letter F. No. 195/7/25/418/81-CX. 5, dated 21-7-1981. Since this is a matter transferred to the Tribunal in terms of Section 35-P of the Central Excises and Salt Act, 1944, it should be deemed that the Tribunal has rejected the stay already as the present Tribunal has to be treated as a successor in office to the Government of India exercising the powers of revision under the old Section 36 of the Act.

He has, further, submitted that the appellants are a Central Government undertaking and no financial hardship can be caused to them as envisaged in terms of Section 35-F of the Act. Shri Jain has, therefore, contended that firstly the present stay application does not lie as the same has been rejected already and secondly that there will be no financial hardship warranting the stay. He has pointed out that the duty due has accrued for the past several years and it should be paid without further delay. Shri Jain, has, therefore, opposed the grant of stay to the appellants on the aforesaid grounds. Controverting the contentions of Shri Jain, Learned Advocate Shri Gagrat has submitted that the Government of India's rejection in their letter dated 21-7-82 of the appellant's application for stay was an ex-parte decision and it was in violation of principles of natural justice. The Tribunal was a quasi-judicial body and it has been given the powers of stay specifically in terms of Section 35-F and it was the appellant's judicial right to avail of this remedy and the Tribunal was vested with the powers to hear the stay application and the Government of India's rejection of the stay petition could not act as a bar to the Tribunal for hearing and deciding the stay petition on merits. He has, therefore, once again urged both on legal grounds as well as on merits, that the stay of the recovery should be allowed.

2. We have examined the submissions of the appellants and the respondent. Since the respondent's representative Shri Jain has raised the issue as to whether the stay will lie to the Tribunal after the Government of India had rejected the application for stay, we proceed to examine this matter first before we come to the merits of the stay petition. In this behalf, we are in agreement with the submissions of the learned Advocate for the appellants that the quasi-judicial body viz. the Tribunal which has been created with effect from 11-10-82, can hear the stay petition in terms of Section 35-F. Besides; there cannot be any bar that the stay when once rejected cannot be agitated and decided again because the grant of stay is depending on the conditions specified under Section 35-F. In other words, it is possible that when the first stay application is decided against the appellants, their financial position might not have justified the grant of stay ; and if thereafter the financial position deteriorates, the appellants are free to come up for stay once again and the Tribunal can given the stay on a second application if satisfied in the matter. However, this is not the case in the present instance and we have made the above observation only to examine the legal issue that the power of stay lies with the Tribunal even when its predecessor in office or the Tribunal has rejected the stay application. Having thus decided this issue in favour of the appellants, we proceed to examine the request for stay on merits. There is no denying the fact that the demands pertain to the period 1966 to 1972. If the duty is leviable as has been decided by two lower authorities at the earlier stages, it is high time that the same is deposited with the Government as its payment is over-due. This observation is without prejudice to the merits of the case. Perhaps, through the negligence and procrastination of the department, the appellants have been given an unduly long time to keep the money in their hands which was due to the Government. This fact is definitely against the appellants' request. Apart from this, we find that the appellants are a Government of India undertaking and the question of their suffering any financial hardship in making the required payment does not arise, especially when the appellant's share capital is owned by the President of India. We, therefore, find that there are no grounds which would justify the grant of stay. Accordingly, we reject the application for stay.


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