Suhas Chandra Sen, J. - (1.) The petitioner has challenged the order passed by the Collector of Central Excise (Appeal), Calcutta refusing the petitioner's prayer to stay the demand and directing the petitioner to deposit the amount of penalty within ten days of the receipt of the order. The petitioner's case is that the Collector failed to take into account the hardship that might be caused to the petitioner if the tax had to be deposited while the appeal was pending. The petitioner has a strong prima facie case and the prayer of the petitioner should have been allowed. The petitioner in the application for stay before the Collector of Central Excise stated inter alia - (i) "We are a Sick Industry as declared under order dated 23-11-1987 in the Case No. 112/87 of the BIFR, New Delhi, copy enclosed. (ii) The grounds in appeal are sound and substantially correct. We hope that the appeal will succeed. (iii) The Industry is passing through severe hardship. The dues cannot be passed on the customers. Payment of the dues or even furnishing Bank Guarantee at this stage will cause severe hardship in the manufacturing programme."
(2.) The order passed by the Board for Industrial and Financial Reconstruction dated 23rd November, 1987 has been annexed. In that order the Board has recorded that the accumulated loss of the Company was 4.36 crores as on 31st March, 1987. The net worth of the Company was Rs. 2.10 crores approximately. It has further been recorded that the Company had suffered cash loss of Rs. 97.3 crores and 55.1 lakh for the years ending on 31st March, 1985 and 31st March, 1986 respectively. The Tribunal, in all probability the Collector (Appeals) however, merely stated that the contention that the petitioner is a sick industry has no force. There is no reason for dispensing with the pre-deposit unless the cause of hardship is backed by adverse financial position based on evidence.
(3.) In my view, the Collector dealt with the case in a cavalier fashion. No enquiry was made by the Collector as to the statement made in the stay petition about the sickness of the Company and about the position of the assets and liabilities of the Company.;