2012 (9) TMI 923 - HC - Central Excise

Waiver of pre deposit - whether Tribunal could have directed pre-deposit of the amount of excise duty once it set aside the adjudicating authority s order and remitted the matter for fresh consideration - Held that - once the Tribunal remits the matter for consideration there is no need of pre-deposit of the amount as no demand stands. In these circumstances the direction of the Tribunal cannot be supported in law at all. This Court has considered the submissions. The show cause notice issued to the assessee culminated into a demand of penalty. The order of the Tribunal had the effect of setting at nought the determination of the adjudicating authority fixing the duty and penalty liability. In these circumstances the Tribunal by no stretch of imagination could have directed the very same amount to be deposited - Court is conscious of the fact that that appeal is pending. Having regard to these contentions of the appellant it is the impugned order has to be set aside to the extent the appellant is aggrieved. The direction to pre-deposit the amounts demanded made by the Tribunal is accordingly set aside. - Decided in favour of assessee.

Summary

Issues:
1. Tribunal's direction to deposit the amount demanded as a pre-deposit.
2. Legality of Tribunal's decision on pre-deposit in the absence of any demand post remand.

Analysis:

Issue 1: Tribunal's direction to deposit the amount demanded as a pre-deposit
The appellant challenged the Tribunal's order directing a pre-deposit of the demanded amount after remanding the matter for fresh consideration. The Tribunal, while accepting the appeal to a limited extent, directed a remand of the entire matter for fresh adjudication by the original authority. The Tribunal also required the appellant to deposit a specific amount before the fresh adjudication. The appellant contended that once the matter was remitted for consideration, there was no existing demand to necessitate a pre-deposit. The High Court examined the contentions and found that the Tribunal's direction for pre-deposit could not be supported in law. The Court noted that the Tribunal's order effectively nullified the earlier determination of duty and penalty liability by the adjudicating authority. Consequently, the Tribunal's decision to require the same amount to be deposited was deemed legally unsustainable.

Issue 2: Legality of Tribunal's decision on pre-deposit in the absence of any demand post remand
The High Court acknowledged the appellant's argument that in the absence of any standing demand post remand, the Tribunal's directive for pre-deposit was unjustifiable. The Court emphasized that the appeal was still pending, and considering the circumstances and contentions raised by the appellant, the impugned order had to be set aside to the extent the appellant was aggrieved. Therefore, the High Court set aside the Tribunal's direction to pre-deposit the amounts demanded, allowing the appeal on these grounds. Additionally, the pending application for ad interim ex-parte stay was disposed of as well.

In conclusion, the High Court ruled in favor of the appellant, holding that the Tribunal's decision to require a pre-deposit of the demanded amount after remanding the matter for fresh adjudication was legally untenable. The Court set aside the Tribunal's direction on pre-deposit, allowing the appeal on these grounds and disposing of the pending application for ad interim ex-parte stay.