2003 (11) TMI 363 - AT - Central Excise

Summary

Issues:
1. Non-compliance with Section 35F of the Central Excise Act leading to dismissal of appeal.
2. Interpretation of demand under Rule 57CC of the Central Excise Rules, 1944.
3. Application of Section 35F to the demand under Rule 57CC.
4. Prima facie case in favor of the appellants leading to waiver of pre-deposit and stay of recovery.

Issue 1:
The ld. Commissioner (Appeals) dismissed the appeal based solely on the non-compliance with Section 35F of the Central Excise Act, directing the party to pre-deposit specific amounts towards duty and penalty. However, the Tribunal found a strong prima facie case in favor of the appellants, allowing the application and proceeding with the appeal without the pre-deposit requirement.

Issue 2:
The impugned order affirmed a demand under Rule 57CC of the erstwhile Central Excise Rules, 1944, confirmed by the Original Authority. The appellants argued that the demand under Rule 57CC is not a demand of duty, and therefore, Section 35F should not be applicable. They relied on a Tribunal decision and a Supreme Court affirmation stating that the amount under Rule 57CC is neither duty nor Modvat credit, making it not recoverable without specific recovery proceedings machinery.

Issue 3:
The Tribunal considered the arguments presented by both sides, including the insistence of the ld. DR on directing the appellants to make a pre-deposit. However, given the prima facie case in favor of the appellants and the legal interpretation of Rule 57CC, the Tribunal waived the pre-deposit requirement and stayed the recovery of duty and penalty amounts. The Commissioner (Appeals) was directed to dispose of the appeal on its merits, following the principles of natural justice.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal by way of remand, emphasizing the importance of considering the specific nature of the demand under Rule 57CC and the applicability of Section 35F in such cases.