2006 (6) TMI 366 - AT - Central Excise

Summary

Issues:
1. Requirement of pre-deposit under the impugned order for Cess payment.
2. Dispute regarding the adjustment of excess payment towards next month dues.
3. Contention that the excess amount realized was a deposit and not duty.

Analysis:
1. The appellants were directed to pre-deposit a substantial amount under the impugned order for Cess payment on petroleum products. The Commissioner revised the procedure for payment, stating that excess payments would be adjusted towards the next month's dues without interest. However, a show cause notice challenged this adjustment, insisting on seeking a refund under Section 11B of the Central Excise Act. The appellants argued that the excess amount was rightfully adjusted as per the Commissioner's procedure, but the Commissioner disagreed, leading to the dispute.

2. The learned Sr. Counsel contended that the excess payment was already with the Government and had been adjusted as per the prescribed procedure. They emphasized that no revenue loss occurred due to this adjustment and that pre-depositing the amount again would cause severe financial hardship. The appellants, being a Joint Venture with the Government of India, argued against the necessity of pre-deposit, highlighting that the adjusted amount was already in government possession. They asserted a strong case on merit and compliance with the Commissioner's directive.

3. After considering the arguments, the Tribunal acknowledged that the excess deposit was indeed with the Government, rendering the demand for pre-deposit unjust and financially burdensome. Recognizing the appellants' strong prima facie case on merit and their adherence to the Commissioner's procedure, the Tribunal granted an unconditional waiver of pre-deposit and stayed recovery pending appeal disposal. The Tribunal prioritized the appeal for an expedited hearing due to the substantial amount involved, setting a specific date for the hearing.

This judgment by the Appellate Tribunal CESTAT, Bangalore, highlighted the importance of procedural compliance, financial implications of pre-deposit requirements, and the Tribunal's discretion in granting relief based on merit and financial hardship considerations.