M/s.Visaka Industries Limitedrep. by its Company SecretaryMr.K.V.SoorianarayananManickanatham VillageParamathy P.O v. Customs

O R D E RThis writ petition has been filed praying that this Court may bepleased to issue a writ of Certiorarified Mandamus to call for therecords relating to the stay order No.813/2011, dated 8.12.2011, onthe file of the Customs, Excise and Service Tax Appellate Tribunal,(South Zonal Bench), Chennai, the first respondent herein, and quashthe same and consequently, direct the first respondent to hear theappeal filed by the petitioner, in Appeal No.E/423&422/09, withoutinsisting on the petitioner making the pre-deposit and to passappropriate orders, on merits and in accordance with law. 2. It has been stated that the petitioner is a holder of CentralExcise Registration No.AAACV7263KXM003. The petitioner is amanufacturer of Asbestos Cement Sheets, classifiable under the sub-heading 6811 of the Central Excise Tariff Act, 1985, using rawmaterials, like, cement, fly ash, cotton, wood pulp, etc. 3. It has been further stated that the petitioner was issued witha show cause notice, dated 7.4.2008, proposing to demand an amount ofRs.15,37,57,177/-, towards the Central Excise Duty on the AsbestosCement Sheets cleared by the petitioner, during the years 2003-04 and2004-05, on the ground that they have wrongly availed exemptionNotification No.6/2002, dated 1.3.2002, during the above periods, byaccounting bogus/excess fly ash receipts. 4. It has been further stated that, based on the investigationconducted, in view of the statements obtained from M/s.NatesanEngineers and Contractors and M/s.Natesan construction products andon the basis of the information provided by the SuperintendingEngineer, M/s.Mettur Thermal Power Station, and as per the procedureslaid down by the Government, for the purpose of availing theexemption notification, the second respondent had come to theconclusion that the petitioner had not used the required percentageof fly ash i.e., 25% or more in manufacturing the Asbestos CementSheets. Therefore, a show cause notice had been issued proposingrecovery of duty amount, along with interest and also proposingimposition of penalty, under Section 11AC of the Central Excise Act,1944. The petitioners had stated, in its reply, inter alia, that theallegations made in the show cause notice were based on presumptionsand assumptions. The ratio of the raw materials used in themanufacture of Asbestos Cement Sheets is as per the rules andregulations, applicable to the petitioner. The fly ash used in themanufacture of Asbestos Cement Sheets had been purchased from thevarious Thermal Power Stations in the States of Tamil Nadu and AndhraPradesh, either by allotment orders made in favour of their company,or from other allottees of fly ashe, through regular transporters. https://hcservices.ecourts.gov.in/hcservices/

5. It had also been stated by the petitioner that it had beenfiling periodical returns to the second respondent Department. Theofficers attached to the various wings of the department had visitedthe petitioner company's units, on a regular basis. Therefore,nothing had been suppressed from the department, at any point oftime, as all the relevant records had been scrutinised by thedepartmental officers. 6. It had been further stated that the averments made inparagraph 2.07 of the SCN, alleging non-payment for the quantum offly ash to be received from M/s.Natesan Engineers and Contractors hadno significance. The documents relied on by the department cannot betaken as dependable evidence, as they are third party documents andtherefore, they cannot be the basis for demanding the duty. Theentire quantity of fly ash purchased by the petitioner had beenrecorded in the books of accounts and paid for by the company.Further, in the SCN there is no proposal to deny the exemptioncontained in the notification No.6/2002-CE, dated 1.3.2002, by theproper officer of the department. Without denying the exemptioncontained in the said notification, the demand made in SCN ispremature and liable to be withdrawn. 7. It has been further stated that on submission of the reply tothe show cause notice issued to the petitioner, the second respondenthad adjudicated the matter, after giving an opportunity of personalhearing to the petitioner, on the basis of the findings given inparagraphs 22 to 29 of the Order-in-Original No.4/2009, dated6.5.2009. The demand order confirmed an amount of Rs.13,23,85,374/-towards the Central Excise duty for the periods in question, alongwith the interest and penalty of an equal amount, under section 11 ACof the Central Excise Act and Rule 25 of the Central Excise Rules. 8. It has been further stated that, aggrieved by the order passedby the second respondent, the petitioner had filed an appeal beforethe first respondent, along with a stay application. While decidingthe stay application, differing views had been expressed by theJudicial Member and the Technical Member. Therefore, the matter hadbeen placed before the President, Customs Excise and Service TaxAppellate Tribunal (South Zonal Bench), Chennai, for the nominationof a third member. Since, the third member nominated by the Presidenthad concurred with the opinion of the Technical Member, thepetitioner had been directed, by the impugned order, dated 8.12.2011,to pre-deposit an amount of Rs.4,50,00,000/-, towards duty, withinsix weeks from the date of the order and to report compliance of theorder, to the Deputy Registrar, on 31.1.2012. Aggrieved by the saidorder, the petitioner had preferred the present writ petition beforethis Court, under article 226 of the Constitution of India. https://hcservices.ecourts.gov.in/hcservices/

9. Various grounds had been raised by the petitioner, in theaffidavit filed in support of the writ petition, in challenging theimpugned order, dated 8.12.2011, on the file of the first respondent.It has been stated, inter alia, that the second respondent had erredin directing the petitioner to make a pre-deposit for granting anorder of stay, against the order demanding the payment of the CentralExcise duty, by the petitioner, for the periods in question, alongwith the interest and the penalty. The conclusion of the secondmember that even if a prima facie case appears to exist, no blanketstay order can be granted, without pleading and demonstrating theexistence of 'financial hardship', is erroneous, as it is a wellsettled position in law that the existence of a strong prima faciecase is a good ground for waiver of pre-deposit. 10. It had also been stated that the said member had also erredin holding that no supporting documents had been furnished tosubstantiate its existence of 'financial hardship'. He had erred inholding that the burden of proof is on the assessee to prove that ithad satisfied the necessary conditions to avail the benefit ofexemption, when there is no violation of the conditions specified inthe notification, when direct procurement of fly ash are made.Further, there is no condition in the notification stating that themanufacturer should ensure that its suppliers should maintain properaccounts. Notification No.6/2002-CE, dated 1.3.2002, in Sl.No.158,exempts goods falling under chapter No.68, in which not less than25%, by weight of fly ash or phosphor-gypsum or both, have beenused. Further, there is no prohibition for re-sale of fly ash, asthere is no such condition prescribed in the notification. As such,it is clear that the second member had traversed beyond theconditions stipulated in the notification in directing the petitionerto make the pre-deposit. Similarly, the findings of the third memberare also contrary to the well established position of law. 11. It has been further stated that once it is found that the endproduct contains 25% or more of fly ash, it would not be open to theauthorities concerned to hold that the petitioner had violated theconditions prescribed in the notification. It is not open to them toinvestigate and to penalise the petitioner for non-maintenance of theaccounts, by the suppliers of fly ash, even though it may be open tothem to initiate appropriate action against such suppliers. As longas the conditions stipulated in the notification had been compliedwith, by the petitioner, it would not be open to the departmentalauthorities to direct the payment of excise duty, by the petitioner,along with interest and penalty, as found in the Order-in-OriginalNo.4/2009, dated 6.5.2009, which has been confirmed, subsequently. https://hcservices.ecourts.gov.in/hcservices/

12. It had also been stated that the petitioner is bound to showonly the usage and consumption of fly ash. The notification does notspecify the place from where the fly ash should be procured, or thepersons from whom it has to be purchased. The petitioner had fullyaccounted for the procurement and usage of the fly ash. As such, thedepartmental authorities do not have a prima facie case to direct thepayment of excise duty, by the petitioner and to penalise thepetitioner by imposing the penalty thereon. 13. The learned counsel for the petitioner had relied on thefollowing decisions in support of his contentions: 13.1. In BONKAIGAON REFINERY & PETROCHEM LTD., Vs. COLLR. OFC.EX.(A), CAL. (1994 (69) E.L.T. 193 (CAL.), the Calcutta High Courthad held as follows:"31. As already seen the phrase "undue hardship" wouldcover a case where the appellant has a strong prima faciecase. The phrase also in my view covers a situation wherethere is an arguable case in the appeal. In the former casethe Appellate Authority should dispense with the pre-deposit altogether on the basis of the authorities referredto earlier. In the latter case the authority would have tosafeguard the interest of the revenue. The Collector hasnot applied his mind to this aspect of the matter at all.He had to consider whether, if the deposit were waived, theinterest of the revenue would be jeopardized. There was nosuggestion or even allegation that there would be anyjeopardy to the revenue if the pre-deposit were waived inthe petitioner's case. Keeping in view the mandate that adiscretionary power must be exercised in favour of theassessee unless there was good reasons to the contrary, noreason has been disclosed by the Collector for refusing toexercise his discretion in favour of the petitionerparticularly when the revenue's interest was not said to beun-safeguarded. It is to be remembered that this Court,while remanding the matter back to the Collector haddirected the petitioner to give an undertaking to thisCourt that it would not deal with or dispose of any of itsassets except in the usual course of business or with theleave of the Court. This undertaking is still subsisting.The Collector did not reject this safeguard as inadequate.The demand relates to a period for the clearance hadalready been made. There is no question of the petitionerrecovering the amount from its customers." 13.2. In GREAVES COTTON AND CO. LTD. Vs. SALES TAX OFFICER ANDANR. (1987) 67 STC 364 (ORISSA), the High Court of Orissa had held asfollows: https://hcservices.ecourts.gov.in/hcservices/ "Keeping in view the stand of the petitioner which hasbeen to a great extent accepted by the Commissioner, thiswould be a most deserving and appropriate case for grant offull stay, and in view of the difference of opinion betweenthe two learned Judges, in my opinion, the view which isbeneficial to the assessee should be accepted. I would,therefore, agree with the conclusion of Honourable JusticeR. C. Patnaik and hold that the order of the Commissioner bemodified and the entire amount under demand be stayed tillthe final disposal of the appeal by the AssistantCommissioner. The Assistant Commissioner is directed todispose of the pending appeal before him within two monthsfrom today."13.3. In WARDHA COAL TRANSPORT PVT LTD., Vs. UNION OF INDIA 2009(13) S.T.R. 490 (BOM.), the High Court of Bombay had held as follows:"8. It is not possible for us to agree with Mr. Desai.It is pertinent to note that in similar fact situation inSSV Coat Carriers Pvt. Ltd., the Tribunal has granted theprayer for waiver of predeposit. Similarly, in KartikayBulk Movers Pvt. Ltd. V/s. Commissioner of Central Excise,Nagpur delivered on 7-10-2008, where also the facts weresomewhat similar, waiver of predeposit has been granted.Moreover, the tribunal in Sainik Mining & Allied ServicesLtd.'s case (supra) has come to the conclusion that servicetax liability does not arise in such cases. Learned counselfor the petitioners is right in contending that thepetitioners have a prima facie case. We may usefully referto the observation of the Supreme Court in Indu Nissan OxoChemicals Industries Ltd.'s case (supra), wherein theSupreme Court has observed that:-"It is true that on merely establishing a prima faciecase, interim order of protection should not be passed. Butif on a cursory glance it appears that the demand raisedhas no leg to stand, it would be undesirable to require theassessee to pay full or substantive part of thedemand......" 9. Viewed in the light of above observations, we are ofthe opinion that the impugned order deserves to be set asideand is set aside accordingly. Once the tribunal has grantedfull waiver atleast in two similarly situated cases, itwould not be proper to take a different view and deny fullwaiver of pre-deposit. Accordingly, we direct waiver of pre-deposit of the amounts in question and stay recovery thereofpending appeal." https://hcservices.ecourts.gov.in/hcservices/

13.4. In RAVI GUPTA Vs. COMMISSIONER OF SALES TAX, DELHI 2009(237) E.L.T. 3 (S.C.), the Supreme Court had held as follows: "10. It is true that on merely establishing a primafacie case, interim order of protection should not bepassed. But if on a cursory glance it appears that thedemand raised has no leg to stand, it would be undesirableto require the assessee to pay full or substantive part ofthe demand. Petitions for stay should not be disposed of ina routine matter unmindful of the consequences flowing fromthe order requiring the assessee to deposit full or part ofthe demand. There can be no rule of universal applicationin such matters and the order has to be passed keeping inview the factual scenario involved. Merely because thisCourt has indicated the principles that does not give alicense to the forum/authority to pass an order whichcannot be sustained on the touchstone of fairness, legalityand public interest. Where denial of interim relief maylead to public mischief, grave irreparable private injuryor shake a citizens' faith in the impartiality of publicadministration, interim relief can be given." 14. In the counter affidavit filed on behalf of the secondrespondent, it has been stated that the writ petition is notmaintainable, in view of the fact that the impugned order is adiscretionary order passed by the first respondent, under section 35Fof the Central Excise and Salt Act, 1944. The said order had beenpassed, by the first respondent, taking into consideration therelevant records, including the written submissions filed on behalfof the petitioner, and in view of the facts and circumstances of thecase, and keeping in view the various decisions of the courts of law. 15. It had been stated that the Government of India had grantedexemption from the payment of excise duty, in case of goods fallingunder entry 68, provided the goods in question contains not less than25% of fly ash or phosphor -gypsum or both, by weight, videNotification No.6/2002-CE, dated 1.3.2002, subject to the followingconditions to be fulfilled by the manufacturers:"(i) The manufacturer maintains proper account in suchform and in such manner as the Commissioner of CentralExcise having jurisdiction may specify in this behalf, forreceipt and use of the fly ash or phosphor-gypsum. (ii) Files monthly returns in form as may be specifiedby the Commissioner of Central Excise having jurisdiction." https://hcservices.ecourts.gov.in/hcservices/

16. It had been further stated that the petitioner had availedthe exemption on the manufacture of the goods, in its factory, underthe Notification No.6/2002-CE, dated 1.3.2002, under the guise ofusing fly ash purchased, from the Mettur Thermal Power Station, forthe periods relating to the years 2003-04 and 2004-05. On 27.8.2005,the officers attached to the Head Quarters Preventive Units, SalemCommissionerate, had visited the factory of the petitioner. Onverification of the documents, which are maintained by the petitionerfor claiming exemption, it was found that the purchase of fly ashfrom the Mettur Thermal Power Station, and the relative production ofthe goods from the factories did not coincide, to prove the 25% ofusage of fly ash in the manufacture of the goods in question, whereasthe forms filed before the officer had claimed that the petitionerhad used 27.91% and 26.65% of fly ash for the manufacture of thegoods. 17. It had been further stated that the records relating to thepurchase of fly ash had been called for. On verification of therecords of the Mettur Power Thermal Power Station, it was found thatthe petitioner had made bogus purchase of fly ash in the name of theMettur Power Thermal Power Station, amounting to Rs.7957.690 metrictones, relating to the year 2004-05 and 2251.311 metric tonesrelating to the year 2003-04. On verification from the Mettur ThermalPower Station, it was clarified, by the Superintending Engineer, videletter, dated 10.3.2008, that, as per clause 4.0 of the terms andconditions in the issue order given to all fly ash removers, the sub-letting of the clearance of fly ash was not allowed. 18. It had been further stated that, on examination of thetransporter of the fly ash, it was found that the differential amountof fly ash had been purchased from other sources. In suchcircumstances, a notice had been issued to the petitioner to showcause as to why the claim of exemption relating to the bogus purchaseof fly ash relating, to the years 2003-04 and 2004-05, should not bedisallowed. The proceedings had been initiated, within the time frameprescribed under the proviso to Section 11A of the Act. 19. It had been further stated that, after objections had beenfiled by the petitioner, and after affording adequate opportunity ofhearing to the petitioner, the Order-in-Original, dated 6.5.2009, hadbeen passed, considering all the aspects raised by the petitioner. 20. Aggrieved by the said order, the petitioner had preferred anappeal before the first respondent, in Appeal No.E/423&422/09. Alongwith the said appeal, the petitioner had also preferred anapplication to stay the Order-in -Original. The first respondent hadpassed an order, dated 8.12.2011, in stay order No.813 of 2011, by amajority of two members, asking the petitioner to pre-deposit an https://hcservices.ecourts.gov.in/hcservices/ amount of Rs.4,50,00,000/-, towards duty, within six weeks from thedate of pronouncement of the said order. It had also been statedthat, subject to compliance with the said direction, pre-deposit ofthe balance amount of duty and interest and penalty had been waivedduring the pendency of the appeal. 21. It had been further stated that the stay order No.813 of2011, dated 8.12.2011, had been passed, as per the provisions ofSection 35 of the Act. The first proviso to the said section reads asfollows:"Provided that where in any particular case, the(Commissioner (Appeals) or the Appellate Tribunal is opinionthat the deposit of duty demanded or penalty levied wouldcause undue hardship to such person, the (Commissioner(Appeals) or, as the case may be, the Appellate Tribunal,may dispense with such deposit subject to such conditions ashe or it may deem fit to impose so as to safeguard theinterests of revenue"22. In view of the specific requirements to be considered by thefirst respondent, before passing an order of stay, the details of thefinancial position has to be considered. Admittedly, the petitionerhad not filed any proof, before the first respondent, to prove theexistence of undue hardship, for the full waiver of the pre-deposit.On hearing the petitioner relating to the aspect of pre-deposit, thefirst respondent had held as follows:"10. ......... In view of the aforecited decisions,even if a prima facie appears to exist, no blanket stayorder can be granted without pleading and demonstratingfinancial hardship. I find that both the appellants havemerely stated in identical terms in the stay petitions thatthey would be exposed to undue financial and other hardshipas their liquidity position is hopelessly bad for thepresent. But no supporting documents or arguments have beenprovided on behalf of the appellants in this regard. I alsofind that the order proposed above does not deal with theaspect of financial hardship. 20. After taking into account the unsubstantiatedsubmission regarding financial hardship and after takinginto account that the appellants could have at the mostmanufactured the impugned goods only to the extent of fourtimes the quantity of fly ash, legally obtained by themagainst quota/allotment made in their name satisfying thecondition on 25% fly ash content, and taking into account https://hcservices.ecourts.gov.in/hcservices/ other attendant facts and circumstances of the case and thelaw laid down in the aforecited decisions of the Hon'bleSupreme Court and the Hon'ble Bombay High Court (videcitations in para 9), I direct the first appellantM/s.Visaka Industries Ltd., to pre-deposit an amount ofRs.4,50,00,000/- (Rupees Four crores and fifty lakhs only)towards duty and the second appellant M/s.Natesan Engineers& Contractors to pre-deposit an amount of Rs.4,00,000/-(Rupees Four lakhs only) towards penalty within six weeksfrom the date of pronouncement of the stay order. Subject tocompliance with the above direction, pre-deposit of thebalance amount of duty, interest and penalty shall remainwaived during the pendency of the appeals." 23. As there was a difference of opinion between the members ofthe first respondent Tribunal, the matter had been referred to thethird member, who had concluded as follows:"28.3. It is also not disputed that the assessee wasallotted a quantity of 2000 metric tones per month by theMettur Thermal Power Station. The assessee had procured onlya quantity of 7285.060 during 2003-04 even though they havepaid advance for lifting 9000 metric tones. Consequently,they have claimed refund of excess amount relating to 2251metric tones. That being the case, the reason for accountingthe said quantity as having been received from MetturThermal Power Station is not prima facie convincing. Inother words, they have received from the Mettur ThermalPower Station lesser quantity than what was accounted asreceived from the Mettur Thermal Power Station. Theexplanation offered was that the said quantity of 2251.121metric tones of fly ash was procured from open market byShri Santhosh Kumar. Similar claims has been made in respectof 7957.690 metric tones of fly ash accounted for the year2004-05 in excess of what has been received from the MetturThermal Power Station. Though, Shri Santhosh Kumar assuredto reveal the names and addresses of persons from whom flyash was procured from "open market", he failed to do so. Inthe absence of evidence from procurement of fly ash by thefirms of Shri Santhosh Kumar, prima facie, their claim thatthey supplied such quantity to the assessee cannot beaccepted. The assessee and the firms or Shri Santhosh Kumarhave special relationship and their failure to produce theevidence regarding their procurement puts the question markon the receipt of quantities in excess of what was actuallyreceived by assessee on the basis of allotment by the MetturThermal Power Station. https://hcservices.ecourts.gov.in/hcservices/

29. In view of the above, I hold that the assessee (thefirst applicant) has not, prima facie, established the useof minimum percentage of fly ash prescribed undernotification No.6/2002 and thus has not made out a primafacie case for waiver. Further, prima facie, the secondapplicant, without any evidence for procurement from thirdparties has prepared documents showing additional supply offly ash and therefore abetted 1st applicant in wronglyavailing the exemption. 30. In view of the above, I prefer to concur with theopinion of the learned Technical Member." 24. It had been further stated that the first respondent had,after taking into consideration the fact that there was no primafacie case made out by the petitioner, for granting an absolutewaiver of pre-deposit, directed the petitioner to remit a sum ofRs.4,50,00,000/-, as duty. Challenging the said order, the petitionerhad preferred the present writ petition before this court. 25. Per contra, the learned Central Government Standing Counselappearing on behalf of the second respondent had submitted that thewrit petition filed by the petitioner challenging the order of thefirst respondent directing the petitioner to make the pre-deposit ofRs.4,50,00,000/- as a condition, for the grant of the stay order isnot maintainable. 26. On considering the various decisions of the courts of law, itis clear that the petitioner has to claim and show the existence of'undue financial hardship’ for the grant of waiver of pre-deposit.Since, in the present case, the petitioner had not filed any documentclaiming undue financial hardship, the waiver of pre-deposit cannotbe granted. further, in view of the fact that the petitioner had notmade out a strong prima facie case in the appeal filed before thefirst respondent, the contentions raised by the petitioner, in thepresent writ petition, cannot be countenanced. As such, the writpetition is devoid of merits and therefore, it is liable to bedismissed. 27. The learned Central Government Standing Counsel appearing onbehalf of the second respondent had relied on the following decisionsin support of contentions:27.1. In BENARA VALVES LTD. AND OTHERS Vs. COMMISSIONER OFCENTRAL EXCISE AND ANOTHER (2009) 20 VST 297 (SC), the Supreme Courthad held as follows: https://hcservices.ecourts.gov.in/hcservices/ "8. It is true that on merely establishing a primafacie case, an interim order of protection should not bepassed. But if on a cursory glance it appears that thedemand raised has no leg to stand on, it would beundesirable to require the assessee to pay the full or asubstantive part of the demand. Petitions for stay shouldnot be disposed of in a routine matter unmindful of theconsequences flowing from the order requiring the assesseeto deposit full or part of the demand. There can be no ruleof universal application in such matters and the order hasto be passed keeping in view the factual scenario involved.Merely because this Court has indicated the principles thatdoes not give a license to the forum/authority to pass anorder which cannot be sustained on the touchstone offairness, legality and public interest. Where denial ofinterim relief may lead to public mischief, graveirreparable private injury or shake a citizens' faith in theimpartiality of public administration, interim relief can begiven.11. Two significant expressions used in the provisionsare "undue hardship to such person" and "safeguard theinterests of revenue". Therefore, while dealing with theapplication twin requirements of considerations i.e.,consideration of undue hardship aspect and imposition ofconditions to safeguard the interest of Revenue have to bekept in view.12. As noted above there are two important expressionsin Section 35F. One is undue hardship. This is a matterwithin the special knowledge of the applicant for waiver andhas to be established by him. A mere assertion about unduehardship would not be sufficient. It was noted by this Courtin S. Vasudeva v. State of Karnataka AIR 1994 SC 923, thatunder Indian conditions the expression "Undue hardship" isnormally related to economic hardship. "Undue" meanssomething which is not merited by the conduct of theclaimant, or is very much disproportionate to it. Unduehardship is caused when the hardship is not warranted by thecircumstances.13. For a hardship to be 'undue' it must be shown thatthe particular burden to have to observe or perform therequirement is out of proportion to the nature of therequirement itself, and the benefit which the applicantwould derive from compliance with it. https://hcservices.ecourts.gov.in/hcservices/

14. The word "undue" adds something more than justhardship. It means an excessive hardship or a hardshipgreater than the circumstances warrant." 27.2. In UNION OF INDIA AND ANOTHER Vs. ADANI EXPORTS LTD. ANDANOTHER (2007) 13 SCC 207, the Supreme Court had held as follows:"8. It is not in dispute that the respondents havefiled appeals before the Tribunal. As noted by the HighCourt, primary challenge in the writ petitions was to theorder relating to pre-deposit. While dealing with that theHigh Court was not justified in going into the merits andexpressing its views and thereafter remitting the matter tothe Tribunal (sic adjudicating authority). Such a course wasnot available to be adopted." 28. In view of the submissions made by the learned counselsappearing for the petitioner as well as the second respondent, and ona perusal of the records available, and on considering the decisionscited supra, this Court is of the considered view that the firstrespondent Tribunal ought to have granted the relief of interim stayof the impugned order, without imposing the condition of pre-deposit,as prayed for by the petitioner, in the present writ petition. 29. Even though the first respondent Tribunal had exercised itsdiscretionary power, Section 35F of the Central Excise and Salt Act,1944, in granting the order of stay, dated 8.12.2011, in Stay OrderNo.813 of 2011, it ought to have taken into consideration the factthat the petitioner had made out a strong prima facie case in theAppeal, in Appeal No.E/423&422/09. 30. From the averments made on behalf of the petitioner, it isclear that certain issues in dispute, between the petitioner and thesecond respondent, have to be analysed in detail, at the time of thehearing of the appeal, based on evidence. However, in view of thematerials available before this court, it could be inferred that thepetitioner has a strong prima facie case in the said appeal. Nodoubt, it is for the first respondent Tribunal to decide the issuesarising for its consideration, on merits and in accordance with law,at the time of the hearing of the appeal. As such, when a strongprima facie case has been made out by the petitioner, the firstrespondent Tribunal ought to have granted an order of stay, as prayedfor by the petitioner, without the condition of pre-deposit, even if‘financial hardship’ had not been shown to exist or proved byacceptable evidence, as held by the supreme court, in RAVI GUPTA Vs.COMMISSIONER OF SALES TAX, DELHI 2009 (237) E.L.T. 3 (S.C.). However,in view of the fact that the interests of the revenue should also besafeguarded, the petitioner is directed to furnish a bank guarantee https://hcservices.ecourts.gov.in/hcservices/ for a sum of Rs.4,50,00,000/-, to the satisfaction of the secondrespondent, within a period of fifteen days from today. On thepetitioner complying with the above said condition, the firstrespondent Tribunal shall hear the appeal and dispose of the same, onmerits and in accordance with law, as expeditiously as possible, notlater than six months from the date of receipt of a copy of thisorder. Accordingly, the writ petition is disposed of, with the abovedirections. No costs. Connected M.P.No.1 of 2012 is closed. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarlanTo:1. Customs, Excise and Service Tax Appellate Tribunal (South Zonal Bench) No.26, Haddows Road Chennai – 600 0062. The Commissioner of Customs & Central Excise No.1, Foulk's Compound, Annai Medu Salem – 636 0011 CC to Mr.V.Sundareswaran, Advocate, SR.10140 1 CC to Mr.Mohammed Shaffiq, Advocate, SR.9717Writ Petition No.2094 of 2012PUR(CO)SRA(21/02/2012)