2012 (10) TMI 768 - AT - Central Excise

Waiver of pre-deposit of Duty along with interest and penalty - appellant has under valued their finished products cleared from the factory premises by not following the procedure of provisions of Section 4A of the Central Excise Act - Held that - As first appellate authority has dismissed/ rejected the appeals only for non compliance - pre-deposit of amount of Rs. 10 Lakhs is sufficient deposit to hear and dispose the appeals.Impugned orders is set aside and directed the first appellate authority to consider the appeals filed by the appellants on merits of the case and take up the matters for disposal after following the principles of natural justice and without insisting on further pre-deposit - Appeals are allowed by way of remand to the first appellate authority.

Summary

Issues: Stay petitions for waiver of pre-deposit of confirmed duty, interest, and penalties; Non-compliance with pre-deposit directions; Consideration of appeals on merits; Appropriate pre-deposit amount.

The judgment by the Appellate Tribunal CESTAT, Ahmedabad involved stay petitions filed by the appellants seeking the waiver of pre-deposit of a confirmed amount of Rs. 40,13,446 as duty, interest, and penalties. The adjudicating authority and the first appellate authority had confirmed these amounts due to the appellants undervaluing their finished products cleared from the factory premises, thereby not following the provisions of Section 4A of the Central Excise Act, 1944. The first appellate authority had dismissed the appeals for non-compliance with the directions of pre-deposit of 100% of the duty liability and 50% of the penalties imposed by the adjudicating authority.

The counsel for the appellants argued that since the first appellate authority did not pass any order on the merits of the case and the appellant had already deposited Rs. 10 Lakhs, which was approximately 25% of the duty confirmed, this amount should be accepted as pre-deposit. The departmental representative confirmed the deposit of Rs. 10 Lakhs. The Tribunal, after considering the submissions, found that the appeals could be disposed of at that stage. Citing a directive from the Hon'ble High Court of Gujarat in similar cases, the Tribunal noted that similarly placed assessees were directed to deposit 8% of the total duty liability confirmed by the lower authorities. In this case, the appellant had already deposited around 20% of the duty amount confirmed by the adjudicating authority.

The Tribunal concluded that the pre-deposit of Rs. 10 Lakhs made by the appellant was sufficient to hear and dispose of the appeals. Therefore, the impugned orders were set aside, and the first appellate authority was directed to consider the appeals on their merits, following the principles of natural justice, without insisting on further pre-deposit. The appeals were allowed by way of remand to the first appellate authority for further proceedings.

In summary, the Tribunal allowed the stay petitions for the waiver of the balance amounts, considered the appeals on their merits, and determined that the pre-deposit of Rs. 10 Lakhs was adequate for the disposal of the appeals, remanding the case back to the first appellate authority for further consideration.