2015 (8) TMI 1303 - HC - Central Excise

Waiver of pre-deposit - financial hardship - Held that - A careful perusal of the impugned orders passed from time to time reveal that the aspect of financial stringency and the capacity of the appellant to make predeposit for a sum of ₹ 10.00 lakhs against the tax liability of ₹ 11,70,317/-, has not been really adverted to and considered by the Tribunal. However, the Tribunal was considerate enough to have extended grace period from to time. Whatever may be the situation seemed to be as on 17.04.2013 when an order of pre-deposit was made, sufficient time was granted to the appellant to comply with the same. Considering the fact that the appeal is a valuable right as provided under the statute, and in view of the submission made by the learned counsel for the appellant that if little more time is granted, they would comply with the condition of pre-deposit, and in the totality of the facts and circumstances of the case, we are inclined to dispose of the appeals with the directions - Decided partly in favor of appellant.

Summary

Issues:
1. Appeal against the Order-in-Original confirming duty liability.
2. Challenge to the appellate authority's decision upholding the original order.
3. Appeal to CESTAT with a request for waiver and stay of excise duty demand.
4. Tribunal's orders regarding pre-deposit and compliance timelines.
5. Non-compliance leading to dismissal of the appeal by CESTAT.
6. Appeal to High Court against the Final Order of CESTAT.
7. Financial hardship as a ground for non-compliance with pre-deposit condition.
8. Consideration of financial stringency and appellant's capacity by the Tribunal.
9. Direction by the High Court for payment of pre-deposit and restoration of the appeal.

Analysis:
1. The appellant filed an appeal against the Order-in-Original confirming duty liability of Rs. 11,70,317. The appellate authority upheld the original order, leading to an appeal before CESTAT seeking waiver and stay of the demand. The Tribunal directed a pre-deposit of Rs. 10.00 lakhs pending appeal, with subsequent extensions granted for compliance.
2. The appellant's plea of financial hardship due to the onerous pre-deposit condition was considered by the High Court. The appellant argued that the pre-deposit amount was unreasonable and detrimental to their industrial operations. The respondent contended that non-compliance with pre-deposit conditions should result in dismissal without further review.
3. The High Court observed that the Tribunal had not adequately considered the appellant's financial constraints when imposing the pre-deposit requirement. Despite granting extensions, the Tribunal did not fully assess the appellant's ability to meet the demand. The Court acknowledged the appeal as a statutory right and directed the appellant to pay the pre-deposit within four weeks for the appeal to be reinstated.
4. The High Court disposed of the Central Excise Appeals with the direction for pre-deposit payment, emphasizing the importance of compliance within the stipulated timeline. Failure to adhere to the payment deadline would result in confirmation of the Final Order without further recourse to the Court. The judgment aimed to balance the appellant's financial challenges with the legal requirements for appeal proceedings.