JUDGMENT

D.K. Jain, J. (Oral)--An order, dated 15th May, 2003 passed by the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi (for short "the Tribunal") in petitioner's stay application No. 116/2003-NB-C in E/Appeal No. 20/2003-NB-C is under challenge in this writ petition.

By the impugned order the Tribunal has directed the petitioner to deposit a sum of Rs. 50 lakhs within eight weeks from the date of the said order as a condition precedent for entertaining their appeal.

2. The material facts giving rise to the present writ petition are as follows :

On the basis of some intelligence report that the petitioner was engaged in the manufacture of excisable goods, namely, Nickel, Tin and Lead alloys in their factory, without obtaining Central Excise Licence L-4 and was removing/clearing the same without payment of Central Excise Duty and without observing certain prescribed formalities, a notice was issued to the proprietor of the petitioner concern to produce the relevant records. On scrutiny of the records, so produced, which included the sales tax declarations, the adjudicating authority came to the conclusion that though there was no direct evidence regarding the manufacture of the said alloys by the petitioner but the circumstantial evidence did indicate that they had been manufacturing the said alloys. Accordingly, he determined a total central excise duty liability of the petitioner at Rs. 2,81,35,533.67 paise, which comprised of Rs. 2,64,85,127.95 paise as basic excise duty and Rs. 16,50,405.72 paise as special excise duty. In addition thereto a penalty of Rs. 10 lakhs was also imposed under erstwhile Rule 9(2) and Rule 173Q of the Central Excise Rules, 1944 read with Section 8A of Central Excise Act, 1944 (for short "the Act").

3. Being aggrieved, the petitioner preferred appeal to the Tribunal with an application for stay of the additional demand created against them. As noted above, by the impugned order the recovery of the entire demand has been stayed by the Tribunal, subject to petitioner's depositing a sum of Rs. 50 lakhs. Hence the present petition.

4. We have heard Mr. O.S. Bajpai on behalf of the petitioner and Mr. P.R. Behl on behalf of the respondents.

5. It is vehemently submitted by Mr. Bajpai that there is not even an iota of evidence with the Department to come to the conclusion that the petitioner was engaged in the manufacture of Nickel/Tin and Lead alloys in their factory and the entire exercise by the adjudicating authority is based on conjunctures and surmises. Learned Counsel would submit that having regard to the facts of the case, requirement of the pre-deposit is an unreasonable restriction on the right of the petitioner to file appeal against an illegal demand. Referring us to the additional affidavit, filed pursuant to our direction, with regard to the financial status of the petitioner and his family members, Mr. Bajpai submits that in view of the precarious financial condition of the family of the petitioner, they would not be in a position to comply with the stringent condition of deposit of Rs. 50 lakhs imposed by the Tribunal, with the result that the petitioner's right of appeal would be rendered illusory. Mr. Behl, learned Counsel for the respondents, on the other hand, submits that bearing in mind the fact that the total demand against the petitioner is over Rs. 2 crores, the condition imposed by the Tribunal cannot be said to be unreasonable and, therefore, the impugned order does not warrant any interference.

6. Section 35F of the Act provides that any person desirous of appealing against any order, shall deposit with the adjudicating authority the duty demanded or the penalty levied. Thus, the deposit of the amount in dispute is a condition precedent for entertainment of an appeal. However, under proviso to the said Section a discretion is conferred on the appellate authority to dispense with such deposit and entertain the appeal, if it is of the opinion that t