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2014 (5) TMI 1050 - HC - Central ExciseWaiver of pre deposit - Fraudulent transactions - Availment of higher Cenvat Credit on rolled products which were described as Non Alloy Steel SLR, Bars & Rods of Non-Alloy Steel Rejected Cut pieces, Bars and Rods of Non-alloy Steel, Non-Alloy Steel Rounds(Rejected), Non-Alloy Steel Rounds (Rejected cut pieces), Round Bar S/L Rejected Round Bar Small Pieces, M. S. Round Cuttings and Non-Alloy Steel Round S/L Rejected. - Held that - Court directed that on deposit of ₹ 10 lacs by the petitioner, the Tribunal shall not dismiss the appeal for want of pre-deposit. However, the deposit was subject to further orders to be passed by this Court. It was stated by learned counsel for the petitioner that the said amount stands deposited by the petitioner. - A further sum of ₹ 15 lacs in addition to the aforesaid amount of ₹ 10 lacs be deposited as a condition precedent for hearing of the appeal by the Tribunal which would meet the ends of justice. - Decided conditionally in favour of assessee.
Issues:
1. Impugned stay order directing pre-deposit under Section 35F of the Central Excise Act, 1944. 2. Fairness and reasonableness of the pre-deposit amount. 3. Quantum of pre-deposit as a condition precedent for hearing the appeal by the Tribunal. Analysis: Issue 1: Impugned stay order directing pre-deposit The petitioner challenged the stay order dated 17-12-2013 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, which directed the petitioner to deposit Rs. 40 lacs as pre-deposit in Appeal No. E/58574/2013. The petitioner, engaged in the manufacture of Alloy and Non-Alloy Steel Ingots, was found availing Cenvat credit improperly, leading to a demand and penalty being imposed. The Tribunal's order required the petitioner to make the pre-deposit for hearing the appeal. Issue 2: Fairness and reasonableness of the pre-deposit amount The petitioner contended that the liability imposed was unjust and excessive, arguing against the need for a Rs. 40 lacs pre-deposit. In response, the Revenue supported the Tribunal's decision, asserting the reasonableness and justification of the pre-deposit amount. This dispute centered on the fairness and reasonableness of the sum required to be deposited as a condition for appeal hearing. Issue 3: Quantum of pre-deposit as a condition precedent The High Court intervened and directed the petitioner to deposit Rs. 10 lacs initially, with a further Rs. 15 lacs to be added for the appeal hearing by the Tribunal. The Court balanced the interests of both parties and determined that a total deposit of Rs. 25 lacs would be appropriate for the appeal to proceed. The Court granted an extension until 15-7-2014 for the petitioner to fulfill the additional deposit requirement, ensuring that the appeal would be heard on merits if the payment was made by the specified deadline. This comprehensive analysis highlights the legal proceedings and decisions concerning the impugned stay order, the fairness of the pre-deposit amount, and the final determination of the quantum of pre-deposit as a condition for hearing the appeal by the Tribunal.
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