2012 (6) TMI 609 - AT - Central Excise

Dismissal of appeal by first appellate authority - non-compliance of the Stay Order directing to deposit 50% of the penalties imposed - appellant have filed application declaring their unit as a sick unit - Held that - As decided in the case of CCE Vs. Saurashtra Cement Ltd. 2010 (9) TMI 422 (HC) it is settled law that unless the first appellate authority records some findings on the merits of the case, Tribunal should not venture into the merits of the case - as appellant company has filed an application for being declared as a sick unit, pre-deposit of any amount would create undue hardship to the appellants - appeals are remanded back to the first appellate authority, to reconsider the issue afresh without insisting upon any further pre-deposit, as the appellants have already deposited entire amount of duty along with interest.

Summary

Issues:
Stay petitions for waiver of pre-deposit of penalties imposed by adjudicating authority and upheld by the first appellate authority.

Analysis:
The judgment deals with stay petitions filed seeking the waiver of pre-deposit of penalties imposed by the adjudicating authority and upheld by the first appellate authority. The appellate judge noted that the appeals themselves could be disposed of at that juncture as the first appellate authority had dismissed the appeals due to non-compliance with the stay order requiring the deposit of 50% of the penalties imposed. The managing director of the appellant company, along with another director, highlighted their application to declare the company as a sick unit, making them unable to make any pre-deposit at that time. The judge observed that since the first appellate authority did not record findings on the merits of non-imposition of penalties, the case could not be delved into on its merits. Despite citing a relevant judgment, it was established that without findings from the first appellate authority, the tribunal should not delve into the case's merits. Considering the hardship pre-deposit would cause due to the sick unit application, the impugned order was set aside, and the appeals were remanded back to the first appellate authority for a fresh consideration without insisting on further pre-deposit, given that the duty amount along with interest had already been deposited. The first appellate authority was instructed to follow principles of natural justice before reaching a conclusion, and the appeals were allowed by way of remand.