2011 (2) TMI 570 - HC - Central Excise

Waiver of pre-deposit - Whether the application for waiver of pre-deposit could be rejected without considering the prima facie case - . There is no denial of the fact that the prima facie case has not been considered by the Tribunal while deciding the application for waiver of the appellant - But, considering the fact that the appeal which was dismissed by the Commissioner (Appeals) along with the appeal of the Assessee has been allowed by the Tribunal, it would be appropriate that the Assessee may be required to furnish the bank guarantee of the impugned amount in the appeal - In case, the appellant furnishes the bank guarantee of the impugned amount, then the appeal may be heard and decided on merits in accordance with law - Appeal is allowed

Summary

Issues:
1. Application for waiver of pre-deposit rejection without considering the prima facie case.

Analysis:
The case involved the M/s. Marble Art, which imported marble blocks, cut them into slabs, polished them, and sold them in the market. The Excise Department issued a notice under the Excise Act, 1944, treating the Assessee as a "manufacturer" and demanding excise duty for a specific period. The Assessee's objections were overruled by the adjudicating officer, leading to an appeal before the Commissioner (Appeals) which was later consolidated with another appeal and dismissed. Subsequently, a second appeal was filed before the Tribunal, including an application for waiver of pre-deposit, which was rejected, necessitating the present appeal.

The substantial question of law revolved around whether the application for waiver of pre-deposit could be rejected without considering the prima facie case. The appellant argued that cutting and polishing marble slabs did not amount to manufacturing until a specific amendment. They also highlighted a judgment in the Trimex case where a similar appeal was allowed. The Division Bench referred to the I.T.C. Ltd. case, emphasizing that undue hardship should be considered, covering situations with a strong prima facie case or an arguable case in the appeal. The Court noted that a strong prima facie case favoring the Assessee was evident based on precedents.

Upon review, it was found that the Tribunal had not considered the prima facie case while deciding the waiver application, leading to the appeal's allowance. The Court decided to remand the matter back to the Tribunal for proper consideration. However, considering that the Assessee's appeal had been allowed by the Tribunal, it was deemed appropriate for the Assessee to furnish a bank guarantee for the disputed amount by a specified date. If the guarantee was provided, the appeal would be heard and decided on its merits. Consequently, the present appeal was allowed, setting aside the Tribunal's order rejecting the waiver application.