2014 (1) TMI 1731 - HC - Central Excise

Application for stay as well as waiver of pre-deposit - ITAT directing the petitioner to deposit 25% of the duty demanded within 8 weeks from that date - Held that - On perusal of the provisions contained under Rule 21 of the Central Excise Rules, 2002, this Court finds that the consideration for the said application is different and, therefore, the said order cannot be linked to the order passed on confirmation of the demand. Furthermore the consideration for application seeking waiver of the pre-condition deposit is well recognized, as in such case the authorities must record their satisfaction relating to the undue hardship and while doing so shall also take into account the interest of the revenues. The aforesaid satisfaction should be arrived independently and on the basis of the materials available with the record or produced before the Tribunal, if permissible under the procedural law. The Tribunal s finding is solely based on rejection of an application for remission of duty and this Court does not find that there has been any recording to the satisfaction relating to the undue hardship as well as the interest of revenue. This Court, therefore, finds that the Tribunal has proceeded to decide the matter extraneously without recording any satisfaction relating to the existence of a prima facie case, irreparable loss and injury, balance of convenience and inconvenience and undue hardship, which are some of the illustrative ingredients for consideration of the said application.The order impugned is, therefore, quashed and set aside and the matter is remitted back to the Tribunal for its re-consideration.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding stay and waiver of pre-deposit. Interpretation of rejection of application for remission of duty. Consideration of satisfaction for waiver of pre-condition deposit.

Analysis:
The petitioner challenged the order of CESTAT directing a 25% deposit of the duty demanded within 8 weeks, following the rejection of an application for remission of duty due to a fire incident. The petitioner did not challenge the remission rejection order, claiming it was not appealable. The appeal was against the confirmation of demand and duty imposition. The Tribunal linked the remission rejection findings to the demand confirmation, leading to denial of waiver based on lack of prima facie case.

The High Court analyzed Rule 21 of the Central Excise Rules, finding the remission application and demand confirmation distinct. The Tribunal's decision lacked independent satisfaction on undue hardship and revenue interest for the waiver application. The Court noted the petitioner's plea on the separation of remission and demand orders, emphasizing the need for a prima facie case, irreparable loss, balance of convenience, and undue hardship for waiver consideration.

The Tribunal's decision was deemed extraneous, lacking satisfaction on key waiver considerations. The Court quashed the order, remitting the matter back to the Tribunal for reconsideration within three weeks. The Court emphasized the need for a proper hearing and lawful disposal. The writ petition was disposed of with no costs awarded.