2011 (4) TMI 1195 - AT - Central Excise

Waiver of pre-deposit - compliance of Section 35F - whether the appellants are liable to discharge the duty liability of their predecessor owners of the factory? - Held that - It does not appear to be in dispute that the factory originally belonged to M/s Prakashalika Marbles Pvt. Limited which came to be purchased by the appellants under deed of conveyance dated 15.05.2002 - appellants have already deposited 50% of the duty, find it appropriate to set aside the impugned order and to remand the matter to the Commissioner to deal with the appeal on merits in accordance with provision of law, while considering the deposit of 50% of duty to be sufficient for the compliance of Section 35F of the Central Excise Act, 1944.

Issues:
1. Dismissal of appeals due to non-compliance with pre-deposit order.
2. Dispute regarding duty liability of predecessor owners.
3. Compliance with Section 35F of the Central Excise Act, 1944.

Issue 1: Dismissal of appeals due to non-compliance with pre-deposit order:
The appellants had filed appeals against orders requiring payment of duty, penalty, and personal penalty. The Commissioner (Appeals) directed them to deposit 50% of the duty and penalty, which they failed to do. Despite a miscellaneous application for modification of the stay order being dismissed, the appellants did not deposit the required amount within the stipulated period. Consequently, both appeals were dismissed. However, during the Tribunal hearing, the appellants deposited 50% of the duty amount as directed, leading to a reconsideration of the matter.

Issue 2: Dispute regarding duty liability of predecessor owners:
The controversy raised by the appellants related to whether they were liable to discharge the duty liability of the factory's previous owners. The factory was originally owned by another entity, which the appellants acquired through a conveyance deed. The Tribunal found that significant legal and factual questions were raised by the appellants regarding this issue. As the appellants had already deposited 50% of the duty, the Tribunal set aside the impugned order and remanded the matter to the Commissioner for a detailed consideration of the appeal on its merits, emphasizing that the 50% deposit sufficed for compliance with Section 35F of the Central Excise Act, 1944.

Issue 3: Compliance with Section 35F of the Central Excise Act, 1944:
The Tribunal clarified that the observations made were solely for the purpose of deciding the appeal concerning the pre-deposit issue. It emphasized that no opinion on the case's merits had been expressed. The Tribunal's decision to set aside the impugned order and remand the matter was based on the appellants' deposit of 50% of the duty amount, which was deemed sufficient for compliance with the legal provisions under Section 35F of the Central Excise Act, 1944. The Commissioner (Appeals) was instructed to consider this deposit as meeting the requirements of the law when deciding the appeal on its merits.

In conclusion, the judgment addressed the issues of non-compliance with pre-deposit orders, the duty liability dispute regarding predecessor owners, and compliance with Section 35F of the Central Excise Act, 1944. The Tribunal's decision to set aside the impugned order and remand the matter for a detailed consideration of the appeal on its merits was primarily influenced by the appellants' deposit of 50% of the duty amount, which was deemed sufficient for legal compliance.

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