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2001 DIGILAW 1380 (PNJ)

Pfizer Limited v. Union Of India

2001-12-07

J.S.NARANG, JAWAHAR LAL GUPTA

body2001
Judgment Jawahar Lal Gupta, J. 1. The petitioner prays that the orders dated September 14, 2001 and October 18, 2001, copies of which have been produced as Annexures P. 10 and P. 12 be quashed. By the first order, the Commissioner (Appeals), Central Excise and Customs, Chandigarh, has disposed of the petitioners application for waiver of pre-deposit. It has been observed that the adjudicating Authority had raised a demand of Rs. 3,46,31,643/-. The petitioner was directed to deposit an amount of Rs. 1 crore within 15 days. The petitioner sought review of this order. The request was declined vide order dated October 18, 2001. Hence this petition. 2. The petitioner alleges that Salinomycin 350 Mycelia as manufactured by it, is a supplement to the animal-feed. It would, thus, be covered under Tariff Item 23.02. The petitioner maintains that no duty is chargeable on this product. 3. The respondents controvert this claim. According to the respondents, the petitioners product falls under Tariff Item 29.41 as it is an antibiotic and not a food-supplement. 4. Whatever be the merits of the case, the short question that arises for consideration before this Court is - Has the competent authority erred in directing the petitioner to pay an amount of Rs. 1 crore as contemplated under the provisions of Section 35F ? 5. Mr. Sarin contends that in view of the decision of their Lordships of the Supreme Court in Collector of Central Excise, Bangalore v. M/s. Tetragon Chemie P. Ltd ., Civil Appeal No. 5833 of 1999 [2001 (132) E.L.T. 525 (S.C.)], the view taken by the Authority that excise duty is leviable, cannot be sustained. It was on the basis of this position of law that the CEGAT had waived the requirement of pre-deposit and stayed the recovery from the petitioner vide order dated June 17, 1999. 6. The claim made on behalf of the petitioner has been controverted by Mr. R.S. Rai, learned Counsel appearing for the respondents. He contends that the duty has been correctly levied. In any case, the order passed by the Commissioner (Appeals) is in conformity with the provisions of Section 35F. Thus, it calls for no interference. With regard to the decision in M/s. Tetragons case (supra), the Counsel submits that the facts are different. 7. He contends that the duty has been correctly levied. In any case, the order passed by the Commissioner (Appeals) is in conformity with the provisions of Section 35F. Thus, it calls for no interference. With regard to the decision in M/s. Tetragons case (supra), the Counsel submits that the facts are different. 7. A perusal of Section 35F of the Central Excise Act, 1944 shows that deposit of the duty demanded or the penalty levied is an essential pre-requisite. However, it is only in a case where the competent authority finds that the deposit of duty demanded or penalty levied would cause undue hardship that it can dispense with the requirement of deposit. In the present case, nothing has been pointed out to show that the petitioner shall suffer an undue hardship. In this situation, we find that the order of the Authority is in conformity with the provisions of Section 35F. We are intentionally not dealing with the decision in Tetragons case lest the interest of either side should be affected. 8. Mr. Sarin submits that the deposit of Rs. 1 crore would result in blockade of money. Thus, the Authority should be directed to decide the appeal expeditiously. 9. The request is fair. It is not opposed by the Counsel for the respondents. 10. In view of the above, we uphold the order passed by the Commissioner (Appeals). It is, however, directed that the appeal shall be decided by the competent authority within three months from the date of deposit by the petitioner. The deposit of Rs. 1 crore may be made by the petitioner within two weeks from today. On making the deposit, the petitioner shall inform the Authority. It is clarified that in case, the petitioners appeal is accepted, the deposit would be refunded alongwith interest as provided for under the Act within one month from the date of the decision. The writ petition is, disposed of, in the above terms. No costs.