A bench of Justices Anoop V Mohta and Anuja Prabhudessai, while dismissing a writ petition seeking waiver of pre-deposit under the Excise Act, held that pre-deposit cannot be waived due to poor financial condition of the assesse.
Before the High Court, the petitioners have sought direction that Appeal filled by them should be heard without insisting on monetary pre-deposit under Section 35 of the Central Excise Act, 1944.
The department strenuously contended that the writ petition is not maintainable since the petitioners have an alternative remedy to challenge the said order under the excise law.
The petitioners contended that existence of alternative remedy is not a bar to writ jurisdiction when the impugned order is arbitrary and is in violation of principles of natural justice.
The bench noted that the order of the Commissioner impugned by the petitioners is Appealable under Section 35B(a)(b) of the Excise Act. “Hence, there is no dispute that the Petitioners have the alternative and equally efficacious remedy to challenge the order passed by the Commissioner.”
The bench further observed that a plain reading section 35F of the of the Excise Act would make it clear that the deposit of certain percentage of duty or penalty is a prerequisite for filing the appeal.
“The provision does not confer any powers on the appellate authority to waive or reduce the mandatory prerequisite. Furthermore, the amounts which is required to be deposited, is 7.5% per cent of the duty demanded or fine imposed, which cannot stated to be exorbitant.
Overruling the contentions of the petitioners, the bench ruled that “the only ground for invoking the writ jurisdiction or seeking waiver of pre-deposit, is that the Petitioners are not in a financial condition to deposit the amount. However, this cannot be considered as an exceptional circumstance to invoke the writ jurisdiction or to waive the pre-deposit, particularly when the amount required to be deposited is 7.5 per cent of the duty demanded.”
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