LexINDU NISSAN OXO CHEMICALS IND. LTD. versus UNION OF INDIA AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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INDU NISSAN OXO CHEMICALS IND. LTD.
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v.
UNION OF INDIA AND ORS.
DECEMBER 11, 2007
(DR. ARIJIT PASAYAT AND AFTAB ALAM, JJ.)
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Customs Act, 1962 -s. J 29E -Stay/dispensation of pre-deposit
- Consideration of "undue hardship" aspect-Imposition of penalty
of Rs. I 0 crores by Commissioner of Customs - Appeal - Tribunal
directing pre-deposit of Rs. 2 crores as condition precedent for hearing c
appeal - Plea of assessee for dispensation of pre-deposit on ground
of financial sickness -- Tenability of - Held: Not tenable - Mere
assertion about financial I undue hardship not sufficient.
Words and Phrases - "undue" and "undue hardship"-
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Meaning of - Jn context to s. l 29E of Customs Act, 1962.
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A dispute arose relating to classification of the product
imported by assessee-company and the consequential benefits
claimed by it under various Notifications issued by the Director
General of Foreign Trade. The customs authorities did not accept E
the stand of the asses~ee about its classification. Subsequently,
the Commissioner of Customs imposed penalty of Rs.I 0 crores.
Assessee challenged the levy of penalty by filing appeal before
the CESTAT which directed pre-deposit of Rupees 2 crores as
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condition precedent for hearing the appeal. Assessee filed writ
petition thereagainst which was dismissed.
In the instant appeal, the assessee-company contended that
it was financially sick and, therefore, insistence on pre-deposit,
would deprive it of the statutory right of appeal.
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Disposing of the appeal, the Court
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HELD: 1.1. In matters relating to grant of stay pending
disposal of the appeal, though discretion is available, the same
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174
SUPREME COURT REPORTS [2007)13 (Addi.) S.C.R.
A has to be exercised judicially. [Para 10] [179-C]
1.2. On merely establishing a prima facie case, interim order
of protection should not be passed. But if on a cursory glance it
appears that the demand raised has no leg to stand, it would be
B undesirable to require the assessee to pay full or substantive part
of the demand. Petitions for stay should not be disposed of in a
routine matter unmindful of the consequences flowing from the
order requiring the assessee to deposit full or part of the demand.
There can be no rule of universal application in such matters and
C the order has to be passed keeping in view the factual scenario
involved. Merely because this Court has indicated the principles
that does not give a license to the forum/authority to pass an
order which cannot be sustained on the touchstone of fairness,
legality and public interest. Where denial of interim relief may
D lead to public mischief, grave irreparable private injury or shake
a citizens' faith in the impartiality of public administration, interim
re,ief can be given. [Para 12] [179 E-G]
Metal Box fl:zdia Ltd,. v. Commissioner of Central Excise,
. Mumbai (2003) lSS EtT '13 {S.C.); Silliguri Municipality and Ors.
E v. Amalendu Das and Ors. AIR (1984) SC 653; Mis Samarias Trading
Co. Pvt. Ltd. v. S. Samuel and Ors. AIR (1985) SC 61 and Assistant
Collector of Central Excise v. Dunlop India Ltd. AIR (1985) SC
330 - relied on.
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2. Two significant expressions used in Section 129E of the
Customs Act, 1962 are "undue hardship to such person" and
"safeguard the interests of revenue". Therefore, while dealing
with the application twin requirements of considerations i.e.
consideration of undue hardship aspect and imposition of conditions
G to safeguard the interest of Revenue have to be kept in view.
[Para 14] [180-E]]
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3. Undue hardship is a matter within the special knowledge
of the applicant for waiver and has to be established by him. A
mere assertion about undue hardship would not be sufficient.
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INDU NISSAN OXO CHEMICALS IND. LTD. v.
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UNION OF INDIAAND ORS. [PASAYAT, J.]
Under Indian conditions expression "undue hardship" is normally
related to economic hardship. "Undue" means something which
is not merited by the conduct of the claimant, or is very much
disproportionate to it. Undue hardship is caused when the hardship
is not warranted by the circumstances. For a hardship to be 'undue'
it must be shown that the particular burden to perform the
requirement, is out of proportion to the nature of the requirement
itself, and the benefit which the applicant would derive from
compliance with it. [Paras 15, 16] [180 F-H; 181-A]
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