ORDER M.C. Agarwal, J.
1. The petition under Article 226 of the Constitution of India challenges an order dated 22nd March, 1995 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, under the proviso to Section 35F of the Central Excises and Salt Act, 1944, directing the petitioner M/s. Kanpur Cigarettes Limited to deposit Rs. 2,20,00,000/- towards duty and penalty levied on it.
2. The petitioner has filed an appeal before the Tribunal against an order dated 17th November, 1993, passed by the Collector of Central Excise, Delhi, whereby the latter levied Rs. 18,01,71,325/- as duty and also imposed a penalty of Rs. 1,80,00,000/-.
3. Under Section 35F of the Central Excises and Salt Act, 1944, the appellant has to deposit with the adjudicating authority the duty demanded or the penalty levied. Under the proviso to Section 35F of the Act, the appellate authority has the power to dispense with such deposit subject to such conditions, as it may deem fit to impose if it is of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person.
4. The petitioner applied to the Tribunal to waive the condition of the deposit of duty and penalty and by the impugned order, the Tribunal allowed the application in part directing the petitioner to deposit Rs. 2,00,00,000/- towards duty and Rs. 20,00,000/- towards penalty.
5. The petitioner's case before the Tribunal was that the demand is unjustified and that it is running in losses and hence it cannot deposit the amounts levied. The Tribunal in its order under challenge has observed that the appellant (petitioner) has made out a strong prima facie case for waiver of pre-deposit and stay of the recovery of the amount to the extent of Rs. 15,85,92,707.51. The Tribunal has also accepted the petitioner's plea of financial hardship, but still has granted only partial waiver directing the appellant to deposit the sum as aforesaid.
6. Feeling aggrieved, the petitioner has filed present writ petition contending that the petitioner is continuously running in losses and it cannot pay the amounts, as directed by the Tribunal and that the petitioner should have been granted complete waiver.
7. I have heard the learned counsel for the petitioner and Sri Shishir Kumar, learned Standing Counsel for the Union of India. The learned Standing Counsel did not desire to file any counter affidavit.
8. The learned counsel for the petitioner took me through the impugned order and also through the balance sheet of the petitioner company to show that it is continuously running in losses and its not worth is not more than a few lacs of rupees. The demands raised against the petitioner are huge and there is nothing in the order of the Tribunal to show that the petitioner can deposit the amounts directed by it without facing undue hardship. It has recorded a categorical finding that the petitioner has made out a prima facie case for waiver in respect of a large portion of the demand.
9. While enforcing the provisions of Section 35F along with the proviso thereto, the appellate authorities have to strike a balance between the interest of the Revenue and the right of the appellant to have his appeal heard on merits. The condition of pre-deposit should not be so enforced as to frustrate the right of appeal itself. In this case, apparently, the petitioner is running in losses and its net worth is not more than a few lacs of rupees. The demands raised against it are extremely large and even the amount required to be deposited under the impugned order is a big sum of Rs. 2,20,00,000/-. The balance sheet does not show any assets out which such a huge amount can be deposited and if the deposit of the sum of Rs. 2,20,00,000/- is insisted upon, the petitioner may not be able to maintain the appeal itself which will have to be dismissed for non-deposit of the amount, referred to above. I am, therefore, of the opinion that it was a fit case in which the Tribunal should have fully waived the condition of pre-deposit. The interests of Revenue could be safe - guarded by a very early disposal of the appeal itself.
10. The writ petition is, accordingly, allowed and setting aside the impugned order dated 22nd March, 1995, it is ordered that the condition of deposit under Section 35F of the Act in respect of the petitioner's appeal pending before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, against the order of the Collector of Central Excise, Delhi, dated 17th November, 1993 is dispensed with. It is desired that the Tribunal shall dispose of the petitioner's appeal as expeditiously as possible.