2016 (3) TMI 1086 - HC - Central Excise

Seeking exemption from pre-deposit - Assessee has to deposit mandatory amount of duty or penalty in dispute @ 7.5% or 10% as the case may be as per amendment made u/s 35F of the Act 1944 which came into force w.e.f. 06/08/2014 - Petitioner submitted that 7.5% of the demand has been deposited and requested that at least the appeal may be heard on merits - Held that - if the petitioner has deposited 7.5% of the demand in terms of order of the adjudicating authority the appeal which has been dismissed by the Tribunal because of non-compliance of the order passed on application u/Sec. 35-F of the Act 1944 be restored and heard on merits. - Notice issued of writ as well as stay application

Summary

Issues:
1. Challenge to Tribunal's order on exemption from pre-deposit under Sec. 35-F of the Act, 1944.
2. Dismissal of misc. application for recalling/modification of the order.
3. Controversy regarding mandatory deposit amount under Sec. 35-F of the Act, 1944.
4. Previous interim protection granted in a similar case.

Analysis:
1. The appellant challenged the Customs, Excise & Service Tax Appellate Tribunal's decision on exemption from pre-deposit under Sec. 35-F of the Act, 1944. The Tribunal had ordered a quantified amount to be deposited in 10 installments, which was contested by the petitioner through an appeal. Subsequently, a DB Central Excise Appeal was filed and later withdrawn with liberty to move a fresh application. The High Court permitted the withdrawal and directed the authority to re-examine the matter sympathetically in accordance with the law.

2. A misc. application for recalling/modification of the Tribunal's order was filed, citing an amendment under Sec. 35F of the Act, 1944 effective from 06/08/2014, which required a mandatory deposit of 7.5% or 10% of the duty or penalty. However, the Tribunal dismissed this application on 23/11/2015, leading to the current challenge in the petition. A similar issue was raised in a previous case where interim protection was granted by the High Court.

3. The controversy surrounding the mandatory deposit amount under Sec. 35-F of the Act, 1944 was highlighted by the appellant, who had already deposited 7.5% of the demand. The counsel requested the appeal to be heard on its merits, emphasizing compliance with the adjudicating authority's order from 31/01/2013. The restoration and hearing of the appeal were sought due to the Tribunal's dismissal based on non-compliance with the Sec. 35-F application.

4. In a previous case, the High Court had granted interim protection to a writ petitioner after considering the amendment introduced under Sec. 35-F of the Act, 1944 effective from 06/08/2014. This history of providing interim relief in similar circumstances adds context to the current plea for the appeal to be heard on its merits. The Court issued notice of the writ and stay application, indicating a further examination of the matter.