S.J. Jha, Vice President (J) - (1.) IN obedience to Tribunal's order dated 7-5-1987 the Registry of the Tribunal issued notice dated 26-5-1987 to the appellants calling upon them to show cause why for non-compliance with Section 35F of Central Excises & Salt Act, 1944 'and Stay Order No. 224/85-C dated 20-12-1985 passed in the case of appeal filed by the appellants to the Tribunal be not dismissed. IN response to this notice the appellants through their Counsel Shri I.C. Upadhyay have filed reply dated 27-7-1987. IN this reply it is submitted that the entire period 4-4-1984 to 29-4-1984 relating to gate pass No. 19* dated 4-4-1984 to 301 dated 29-4-1984 amounting to Rs. 1,82,204.55 is covered by Notification No. 246/85-C.E. dated 6-1-1985. The reply further states that the respondent has no locus standi or jurisdiction to demand this differential duty in view of this notification issued under Section 11C of the Act. The reply further states "by virtue of above notification there is no liability cast on the appellants to deposit the amount demanded by the respondents. Moreover, the respondents have no authority or jurisdiction to demand the amount of differential duty in the light of the above notification". The reply then prays that the appeal may kindly he ordered to be allowed with consequential relief.
(2.) At the hearing on 28-7-1987 Shri I.C. Upadhyay reiterated the points made in the reply. He also stated that if the order of the Tribunal is adverse to him, he would challenge the matter in the High Court. Shri Shishir Kumar, SDR submitted that as the appellants had neither complied with Section 35F of the Act nor with the Stay Order No. 224/85-C dated 20-12-1985, the appeal deserves to be dismissed for non-compliance with Section 35F of the Act. Some facts in brief relevant for the present order need to be referred to. Stay Order No. 224/85-C dated 20-12-1985 shows that the Tribunal after taking note of the appellants having deposited Rs. 60,000/-and Notification No. 246/85-C.E. dated 6-12-1985 waived pre-deposit of balance of duty and stay realisation of the demand on condition that appellants furnished bank guarantee within a period of two months from the date of the order. The order further stated that failing compliance with the order it shall stand vacated and the appeal will be liable to be dismissed under Section 35F of the Act. The appellants filed another application dated 15-3-1986 through their Counsel (Misc. Application No. 141/86-C) praying for modification of the stay order by waiving condition of bank guarantee. The main ground urged for modification was Notification No. 246/85-C.E. dated 6-12-1985 (there was no request for extension of time to comply with the order). By Order No. 49/87-C after hearing Shri Upadhyaya, Advocate in support of the application and Shri Sundar Rajan, JDR for the respondent, the Tribunal rejected the prayer for modification of Stay Order No. 224/85-C dated 20-12-1985 on the ground that stay order calling upon the appellants to furnish bank guarantee had been passed after taking into consideration the notification and there was no change in circumstances to justify modification of the stay order. The present notice was then ordered to issue to the appellants.
(3.) SECTION 35F of Central Excises & Salt Act, 1944 which is analogous to SECTION 129E of the Customs Act, 1962 as at present and the earlier SECTION i29 of the same before its amendment in 1980 is reproduced below : "SECTION 35-F. Deposit, pending appeal, of duty demanded or penalty levied - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case, the Collectors (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Collector (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of revenue". Notification No. 246/85-C.E. dated 6-12-1985 on which Shri Upadhyay relied for the argument that -duty cannot be demanded is also reproduced below : "Whereas the Central Government is satisfied that according to a practice that was generally prevalent regarding levy of duty of excise (including non-levy thereof), under SECTION 3 of the Central Excises and Salt Act, 1944 (1 of 1944), certain varieties of vegetable product, falling under Item No. 13 of the First Schedule to the said Act, were liable to a higher amount of duty of excise in terms of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 259/83-Central Excises, dated the 15th October, 1983, than what was levied with reference to the rate specified in the said First Schedule, read with any notification for the time being in force issued by the Central Government in relation to the duty of excise so chargeable, during the period commencing on the 15th October, 1983 and ending with the 29th April, 1984. Now, therefore, in exercise of the powers conferred by SECTION 11C of the said Act, read with Sub-section(4) of SECTION 55 of the Finance Act, 1983 (11 of 1983) and Sub-section(4) of SECTION 52 of the Finance. Act, 1984 (21 of 1984), the Central Government hereby directs that so much of that portion of the duty of excise payable under the said Central Excises and Salt Act, 1944 and the special duties of excise payable under Sub-section (1) of SECTION 52 of the said Finance Act, 1984, on such varieties of vegetable product, but for the said practice, shall not be required to be paid in respect of such varieties of vegetable product on which that portion of the said duty of excise and the special duties of excise were short levied during the period aforesaid, in accordance with the said practice.";