M/S Rishabh Laboratories Private Limited vs. Customs Excise And Service Tax Apellate Tribunal

Held

The Court held that even if the Tribunal is satisfied with the claim of undue hardship, it has the discretion to grant either a full or partial waiver of the pre-deposit. The Supreme Court's judgment in Benara Valves Ltd. and ors. v. Commissioner of Central Excise and Anr. was cited as authoritative, emphasizing that the Tribunal must consider both the aspect of undue hardship and the need to safeguard the interests of the revenue. The Court noted that there is no straight-jacket formula for granting waivers. The Court declined to delve into whether the appellant's case deserved a full waiver because the appellant's counsel had made a submission before the Tribunal suggesting a liability of Rs. 7,03,916/- if tax was indeed payable, which seemed inconsistent with a claim for full waiver. However, the Court granted the appellant liberty to approach the Tribunal again to argue for full waiver based on relevant considerations, with an expectation that such an application would be decided within three weeks.

Facts

The appellant, M/s Rishabh Laboratories Private Limited, filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) against an order passed by the adjudicating authority and the Commissioner (Appeals). The appellant also filed an application for waiver of pre-deposit, citing undue hardship. The CESTAT, by an impugned order, granted a partial waiver of the pre-deposit. Aggrieved by this partial waiver, the appellant filed the present appeal before the High Court, which was admitted on a substantial question of law concerning the Tribunal's perversity in not granting full waiver despite being satisfied with the claim of undue hardship.

Key Issues

1. Whether the Tribunal, having been satisfied with the claim of undue hardship, committed perversity in law by not granting a full waiver of the pre-deposit amount? (Question of law) Contentions: Petitioner/Appellant: Argued that where an assessee can establish that the demand itself is not permissible under the law or that the issue has been decided by a High Court or the Supreme Court, a claim for full waiver requires examination, considering a strong prima facie case. Relied on judgments including J.N. Chemical (Pvt.) Ltd. v. CEGAT, Hooghly Mills Company Limited v. Union of India, and Union of India and anr. v. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. Revenue/State: Did not record specific arguments against the appellant's contention on the extent of waiver, but the Court referred to the Supreme Court's judgment in Benara Valves Ltd. and ors. v. Commissioner of Central Excise and Anr. regarding the Tribunal's discretion and considerations for waiver.