Sharad Shyamsundar Sharma vs. Union Of INDIA

Held

The Court did not enter into the merits of the case or the contentions raised by either party. The primary issue that emerged was the maintainability of the writ petition in light of the alternative statutory remedy. The respondent authorities pointed out that the company had already filed an appeal before the CESTAT and had made the necessary pre-deposit as per Section 35F(ii) of the Central Excise Act, 1944. This fact, as stated by the respondents, meant that the petitioner was not required to separately deposit any amount for filing his appeal. Given this submission by the revenue, the learned counsel for the petitioner expressed a desire to withdraw the present petition to avail the statutory remedy within two weeks. The Court permitted the withdrawal, stating that no objections regarding limitation would be raised and that the petitioner could pursue all legal contentions before the appropriate forum. The Court explicitly noted that it had not entered into the merits of the matter.

Facts

The petitioner, Sharad Shyamsundar Sharma, was the General Manager of M/s. FAG Bearing India Limited. The company manufactured ball bearings and allegedly did not pay Excise duty. The petitioner challenged an order-in-original dated March 12, 2018, which imposed a personal penalty of Rs. 5,78,96,015 on him under Rule 26(1) of the Central Excise Rules, 2002. The petitioner argued that the penalty was imposed without assigning reasons and that availing the statutory appellate remedy would require a substantial pre-deposit, which he could not afford. The respondent authorities contended that the writ petition was not maintainable due to the availability of an alternative statutory remedy under Section 35G of the Central Excise Act, 1944, before the CESTAT. They also stated that the company had already filed an appeal before the CESTAT under Section 35B, and the required pre-deposit of 7.5% of the duty under Section 35F(ii) had been made by the company.

Key Issues

1. Whether the writ petition is maintainable before this Court under Article 226 of the Constitution of India, given the availability of an alternative statutory remedy before the CESTAT under Section 35G of the Central Excise Act, 1944? Petitioner's contention: The petitioner argued that the imposition of a huge personal penalty without assigning reasons made the statutory appeal remedy practically unavailable due to the requirement of a sizeable pre-deposit. He sought to bypass the appellate route due to this financial burden. Revenue's contention: The respondent authorities argued that the writ petition was not maintainable on the sole ground that the petitioner had bypassed the statutory alternative remedy available under Section 35G of the Central Excise Act, 1944, before the CESTAT. They further submitted that the company had already filed an appeal before the CESTAT, and the requisite pre-deposit under Section 35F(ii) had been made, implying the petitioner was not required to make a separate deposit for his appeal.