[Order per : Harish Chander, Member (J)]. - Tata Iron and Steel Co. Ltd., Jamshedpur has filed an appeal being aggrieved from the order passed by the Collector of Central Excise, Patna. Simultaneously, a stay application was also filed which was registered as stay application No. E/2213/90-B1. The said stay application was disposed of by the Tribunal vide stay order No. 114/1990-B1 dated 20th March, 1990, as there was no quantification of demand. Thereafter, a fresh stay application duly supported with an affidavit sworn before a Notary Public was filed requesting the Tribunal to dispense with the pre-deposit of the duty amount of Rs. 82,72,410.60 and penalty of Rs. 2,00,000.00. The Tribunal vide stay order No. 249/90-B1 dated 18th July, 1990 had disposed of the same on the condition of the applicant’s depositing Rs. 30,00,000.00 (Rs. thirty lacs only) within three months from 18th July, 1990. The stay order passed by the Tribunal was challenged before the Hon’ble Delhi High Court by a writ petition under Articles 226 and 227 of the Constitution of India and in the writ petition the applicant had made the following prayers :-

“(a) call for the records of the case and issue a writ of certiorari or any other appropriate writ, order or directions quashing the direction contained in the order of the Tribunal, Respondent No. 4, dated 18-7-1990 (Annexure-J) insofar as it requires the petitioner to deposit a sum of Rs. 30 lacs as a condition for waiver of pre-deposit and to quash order of the Collector of Central Excise, respondent No. 2, dated 29-12-1989/12-2-1990 (Annexure-F) and to quash the directions contained in letter dated 12-6-1990 issued by the Assistant Collector of Central Excise, Respondent No. 3 (Annexure-H);

(b) issue a writ of mandamus or any other appropriate writ order or directions directing the Tribunal, Respondent No. 4, to hear and dispose of the appeal pending before it against the order of Collector of Central Excise, dated 29-12-1989/12-2-1990 being No. 1716/90-B1 without insisting on pre-deposit of Rs. 30 lacs as erroneously directed in its order dated 18th July, 1990, and to restrain the Respondents from taking any steps or action pursuant to the order of the Collector of Central Excise, Respondent No. 2, dated 29-12-1989/12-2-1990 (Annexure-F) and the letter issued by the Assistant Collector of Central Excise, Respondent No. 3 dated 12-6-1990 (Annexure-H);

(c) issue a writ of prohibition and/or any other appropriate writ, order or direction in the nature thereof restraining the Respondents from taking any action or steps pursuant to the order of the Collector of Central Excise dated 29-12-1989/12-2-1990 (Annexure-F) and the directions contained in the letter dated 12th June, 1990, issued by the Assistant Collector of Central Excise, Respondent No. 3 (Annexure-H);

(d) award the costs of the writ petition; and

(e) pass such other and further orders as may be deemed just and proper in the facts and circumstances of the case."

Simultaneously, a stay application duly supported with an affidavit was also filed and in the said application the applicant had made the following prayer :-

“(a) grant stay of the order of the Tribunal dated 18th July, 1990 insofar as it directs the petitioner to deposit a sum of Rs. 30 lacs as a condition for dispensing with pre-deposit under S. 35 of the Act and to stay the operation of the order of the Collector, Central Excise, Respondent No. 2 dated 29-12-1989/12-2-1990 (Annexure-F to the writ petition) and stay the operation and implementation of the direction contained in the letter dated 12-6-1990 issued by the Assistant Collector, Respondent No. 3 (Annexure-H to the writ petition);

(b) grant ad interim ex parte stay in terms of prayer (a) hereinabove; and

(c) pass such other and further orders as may be deemed just and proper in the facts and circumstances of the case."

The writ petition No. 3690/90 had come up for hearing before the Hon’ble Delhi High Court and the Hon’ble High Court was pleased to pass the following order :-

“Present: Mr. F.S. Nariman, Sr. Advocate with Mr. Ravinder Narain for the petitioner.

C.W. 3690/90

Notice to the respondents to show-cause why rule nisi be not issued returnable for 22nd February, 1991."

By the present miscellaneous application for the early hearing, the applicant makes a prayer for grant of early hearing. Shri Ravinder Narain, the learned advocate has appeared on behalf of the applicant. He has reiterated the contentions made in the miscellaneous application for early hearing. Shri Ravinder Narain, the learned advocate stated that at the present Section 35F of the Central Excises and Salt Act, 1944 does not come in the way of the Tribunal for the disposal of the appeal on merits. He pleaded for the early hearing of the appeal.

He had raised the following grounds :-

(i) The matter is covered by an earlier judgment of the Tribunal in the case of Indian Iron and Steel Co. Ltd. v. Collector of Central Excise, Bolpur reported in .

(ii) The demand is time-barred.

(iii) There is recurring effect.

(iv) The stay order passed by the High Court in C.M. 5677/90 dated 21st November, 1990 does not come in the way of hearing of the appeal in terms of provisions of Section 35F of the Central Excises and Salt Act, 1944.

He has pleaded for the grant of early hearing.

2. Shri M.S. Arora, the learned JDR who has appeared on behalf of the respondent pleaded that the earlier judgment of the Tribunal in the case of Indian Iron and Steel Co. Ltd. v. Collector of Central Excise reported in is distinguishable from the facts of the case. He has referred to paragraph 2 of the statement of facts. He pleaded that the order passed by the Hon’ble Delhi High Court is an interim order and the final view can only be taken after the decision on 22nd February, 1991, when the matter is listed before the Delhi High Court.

3. We have heard both the sides and have gone through the facts and circumstances of the case. We have perused the stay application filed before the Delhi High Court. The title of the stay application is reproduced below :-

“APPLICATION FOR EX-PARTE AD INTERIM STAY AND STAY BY NOTICE OF MOTION UNDER S. 151 OF THE CODE OF CIVIL PROCEDURE, 1908, READ WITH THE ORDERS AND RULES OF THIS HON’BLE COURT.”

We have perused the order passed by the High Court. Relevant portion of the order in C.M. 5677/90 is reproduced below :-

“C.M. 5677/90.

Notice to respondents for 22nd February, 1991.

In the meantime, the operation of the impugned order of the Collector, Central Excise, dated 29th December, 1989/12th February, 1990 shall remain stayed.

Sd/-M.K. CHAWLA, J

Sd/- ARUN KUMAR, J"

21-11-1990

A simple perusal of the order shows that the Hon’ble High Court has stayed the order passed by the Collector of Central Excise, dated 29th December, 1989/12th February, 1990. The Tribunal had passed the stay order No. 249/90-B1. Para Nos. 5, 6 and 7 from the said order are reproduced below :-

“5. We have heard both the sides and have gone through the facts and circumstances of the case. We have also gone through the earlier order of the Tribunal in the case of Indian Iron and Steel Co. Ltd. reported in . On internal page 6 which appears on page 23 of the paper book in the said order there is an observation of the Tribunal that: ”So long as the excisable goods are manufactured in a workshop within a factory and intended for the use in the said factory for the purpose of repair and maintenance of machinery, the exemption cannot be denied on the score that only goods capable of manufacture in a workshop which is restricted to a tool-room is eligible for exemption." In the matter before us, the factory is located at a distance of 10 Kms. from the other factories where the excisable goods are manufactured. The merits of the matter are contentious. During the course of arguments we had enquired from Shri Ravinder Narain, the learned advocate as to how much the applicant can pay. Shri Ravinder Narain pleaded no financial hardship. The limitation aspect of the matter is arguable. During the course of arguments, Shri Ravinder Narain also mentioned CT-2 certificate though dated 28th June, 1988 is just simple and other part certificates are part of the record.

6. Keeping in view the totality of the facts and circumstances of the case, we are of the view that if the applicant is desired to deposit the fully duty amount of Rs. 82,72,410.60 and penalty of Rs. 2,00,000.00, it will amount to undue hardship. We dispense with the pre-deposit of the same on the condition of the applicant’s depositing Rs. 30,00,000.00 (Rs. thirty lacs only) in cash within three months from today. We further order that during the pendency of the appeal, the revenue authorities shall not pursue the recovery proceedings for the balance duty and penalty amount.

7. Shri Ravinder Narain during the course of arguments also made a prayer for the grant of stay in respect of future demands on the basis of the impugned order. We would like to observe that the facts and circumstances of the case do not justify the exercise of inherent power for the grant of stay for future clearances, but we have no hesitation in making an observation to the effect that in case if the revenue authorities so choose to create demand for future clearances on the basis of the impugned order, they can do so only in accordance with law."

For the proper appreciation of legal position Section 35F is reproduced below :-

“Section 35F. 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 Collector (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 interests of revenue."

A simple perusal of the same shows that 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. In the matter before us the Hon’ble High Court was pleased to order that the operation of the impugned order passed by the Collector of Central Excise, dated 29th December, 1989/12th February, 1990 shall remain stayed. During the course of arguments, we had enquired from Shri Ravinder Narain whether the order passed by the Hon’ble Delhi High Court is an ex parte order or was passed after giving hearing to the respondent. To this, Shri Ravinder Narain, the learned advocate fairly stated that it was an ex parte order. Now the Hon’ble Delhi High Court vide its order dated 21st November, 1990 has listed the matter for 22nd February, 1991 with a direction for the issue of notice to the respondent. We had passed the stay order No. 249/90-B1 dated 18th July, 1990 dispensing with the pre-deposit of the duty amount of Rs. 82,72,410.60 and penalty of Rs. 2,00,000.00 on the condition of the applicant’s depositing Rs. 30,00,000.00 (Rs. thirty lacs only) in cash within three months from 18th July, 1990. While passing the stay order, we had looked into the prima facie merits as well as the liquidity position of the applicant in view of the judgment of the Delhi High Court in the case of Uptron Powertronics v. Collector of Central Excise, Meerut, reported in . We had also looked into the liquidity position of the applicant in view of the judgment of the Supreme Court in the case of Sonodyne Television Company. v. Collector of Central Excise, Calcutta, reported in . Judgment of the Supreme Court in the case of Spencer and Co. Ltd. v. Collector of Central Excise is reproduced below :-

“We are in agreement with the contention of the counsel for the petitioner that the expression ‘undue hardship’ occurring in the proviso to Section 35F of the Central Excises and Salt Act, 1944, would include consideration, inter alia, of the aspect of liquidity possessed by the assessee. We are not inclined to take the view that the impugned order gives any indication that aspect has been completely ignored as was contended by counsel. With these observations, the special leave petition is dismissed."

4. In view of the above discussion, we are of the view that the application for early hearing should be considered only after the finalisation of the stay order passed by the Hon’ble Delhi High Court on 22nd February, 1991, as it will be improper for us to express our views, as the matter is sub judice before the Hon’ble Delhi High Court.

5. The matter to be listed for mention on 28th February, 1991. Both the sides to place a copy of the order likely to be passed by the Hon’ble Delhi High Court.