Case Note & Summary
The writ petition arose from an order dated 22.11.2016 passed by the Commissioner of Central Excise and Customs, Belapur Commissionerate, which the petitioners challenged under Article 226 of the Constitution. The petitioners, a private limited company and its director, sought to quash the Commissioner's order and alternatively prayed for a direction that their appeal filed under Section 35B(1)(b) of the Central Excise Act, 1944 be heard without insisting on the mandatory pre-deposit of 7.5% of the duty demanded, citing financial difficulties. The Revenue raised a preliminary objection regarding maintainability, asserting that an equally efficacious alternative remedy by way of statutory appeal was available. Before the High Court, the petitioners contended that the impugned order was arbitrary and violative of natural justice, and that the pre-deposit requirement was onerous, relying on precedents including Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556. The respondent countered that no substantial grounds of illegality or procedural infirmity were pleaded, and that financial inability per se could not justify bypassing the statutory scheme. The court examined the well-recognized exceptions to the exhaustion of statutory remedies: proceedings under a provision ultra vires the law and orders passed in breach of natural justice. It found that the petitioners had not challenged any provision as ultra vires and had not placed any material on record to substantiate a violation of natural justice. Further, the court noted that Section 35F of the Central Excise Act, 1944 unambiguously mandates a minimum deposit as a prerequisite to entertaining an appeal, and that the appellate authority has no discretion to waive or reduce this requirement. The court observed that a deposit of 7.5% could not be termed exorbitant, and that mere financial hardship did not constitute an exceptional circumstance either to invoke writ jurisdiction or to seek waiver of the pre-deposit. Accordingly, the High Court declined to exercise its writ jurisdiction and dismissed the petition, leaving the petitioners to pursue their statutory appeal upon complying with the pre-deposit mandate. No costs were awarded.
Headnote
A) Constitutional Law - Writ Jurisdiction - Alternative Remedy - Central Excise Act, 1944, Section 35B(1)(b) - The court held that a writ petition under Article 226 is not maintainable when an equally efficacious alternative remedy of statutory appeal under Section 35B(1)(b) is available, unless the order is challenged as ultra vires or in violation of natural justice. Held that the petitioners failed to make out any such exceptional circumstances. (Paras 6-7) B) Central Excise - Appeals - Pre-deposit Requirement - Central Excise Act, 1944, Section 35F - The court observed that Section 35F mandates deposit of 7.5% of the duty demanded or penalty imposed before an appeal can be entertained, and the appellate authority has no power to waive or reduce this pre-deposit. (Paras 8-9) C) Central Excise - Appeals - Waiver of Pre-deposit - Financial Hardship - Central Excise Act, 1944, Section 35F - The court held that a plea of financial inability to pay the pre-deposit does not constitute an exceptional circumstance to invoke writ jurisdiction or to seek waiver of the mandatory deposit under Section 35F, especially when the amount required is 7.5% of the duty demanded, which is not exorbitant. (Paras 9-10)
Issue of Consideration
Whether writ petition under Article 226 is maintainable challenging an order of the Commissioner of Central Excise when an alternative statutory appeal under Section 35B(1)(b) of Central Excise Act, 1944 is available, and whether the pre-deposit condition under Section 35F can be waived on grounds of financial difficulty.
Final Decision
Writ Petition dismissed. No order as to costs. Court declined to entertain the petition due to availability of equally efficacious alternative remedy and absence of exceptional circumstances to waive pre-deposit under Section 35F of Central Excise Act, 1944.
Law Points
- Alternative statutory remedy does not bar writ jurisdiction if order is ultra vires or violates natural justice
- Section 35F of Central Excise Act
- 1944 mandates deposit of certain percentage of duty/penalty before filing appeal
- Appellate authority has no power to waive mandatory pre-deposit
- Financial hardship not an exceptional ground to waive pre-deposit
