The Court emphasized the statutory right of appeal and the authority's duty to consider the prima facie merits of the appellant's case. It also highlighted the burden of proving marketability of goods for duty.

( 1 ) THIS writ petition has been filed for quashing the order dated 8. 10. 2003 passed by the learned commissioner (Appeals), Customs and Central Excise, Meerut, rejecting the application of the petitioner for stay/waiver of pre-deposit of the amount demanded by the Assessing Authority during the pendency of the appeal, to the tune of Rs. 1,60,93,806 and in case the said amount is not deposited within 15 days of the receipt of the said order, the appeal would stand dismissed without further reference to the Appellate Authority.

( 2 ) FACTS and circumstances giving rise to this case are that petitioner was served with a show cause notice dated 25. 6. 1998 issued by the Assistant Commissioner, Central Excise, Saharanpur to show cause why the profit margin percentage as detailed therein be not increased to arrive at the assessable value of "slides and Inner Frames" used by the Company during the course of packing of cigarette sticks, for the assessment years 1986-87 to 1996-97. Petitioner filed the reply to the show cause notice on 22. 7. 1998 and 8. 10. 1998 submitting that the "slides and Inner frames" neither manufactured nor a marketable commodities and, thus, could not be subjected to levy of duty. More so, as the show cause notice was based on a notification dated 30. 10. 1996, it could not be given effect retrospectively. The adjudicating Officer vide order dated 26. 12. 2000, held that the profit margin would have to be worked out on the basis of the said circular dated 30th October, 1996 in respect of the price list for the period from 1. 7. 1988 to 31. 3. 1998. Being aggrieved and dissatisfied, petitioner preferred the appeal under Section 35 of the Central Excise act, 1944, hereinafter called the Act. Along with the appeal, an application for waiver of the pre-deposit condition was also filed on the ground that the petitioner was not liable to pay any duty at all as "slides and Inner Frames" were neither manufactured nor marketable and the petitioner had a fool proof case and was bound to succeed in appeal. The said application has been rejected vide impugned order dated 8. 10. 2003 holding that the petitioner-Company did not plead the issue of financial hardship nor it could plead so in view of the stature being an established company of India and there was no strong prima facie case could be made out for waiver. Hence this petition.

( 3 ) SHRI Shanti Bhushan, learned Senior Counsel appearing for the petitioner assisted by Shri yashwant Verma, Advocate, has submitted that if it is established before the Appellate Authority that the applicant has a very strong case on merit, the Appellate Authority is bound to examine the issue on merit prima facie. Financial hardship does not mean as to whether the appellant is in a position to make the payment or not but a prima facie case has to be examined as to whether the appellant is liable to make the payment at all and in case the appellant has a case on merit, the authority cannot reject the application. The petitioner-appellant has made an attempt to satisfy the Appellate Authority that the "slides and Inner Frames" were neither manufactured nor marketable and, thus, could not be subjected to duty at all and this issue was not considered at all by the Appellate Authority. More so, after introduction of Modvat system, the situation cannot be compared with the earlier period. The Appellate Authority and the Assessing Authority while deciding whether the "slides and Inner Frames" are manufactured and marketable, had placed reliance upon the judgment in inter se parties decided by the CEGAT, which had already been set aside by the Honble Apex Court in I. T. C. Ltd. v. Collector of Central Excise, Bombay, 2003 (85) ECC 17 (SC) : (2003) 1 SCC 634, therefore, the Appellate Authority ought to have applied its mind to the issues raised by the appellant. Thus, petition deserves to be allowed.

( 4 ) ON the contrary, Shri Uma Kant, learned counsel appearing for the re