2013 (1) TMI 99 - AT - Central Excise

Non satisfaction of provisions of Section 35F of Central Excise Act, 1944 - seeking waiver of pre deposit - Held that - Unable to go into the merits of the case as the first appellate authority has not given his findings on the merits. In any case, the issue being the valuation i.e. non-inclusion of the cost of cylinders which were used for manufacturing of labels for their customers, is a question of interpretation as also a question of fact. The appellant need to be put to some condition for hearing and disposing the appeal by the first appellate authority. Accordingly directs the appellant to deposit an amount of Rs. 3,25,000/- within eight weeks from today and report compliance on 19.02.2013 before the Commissioner (Appeals).

Summary

Issues: Stay petition for waiver of pre-deposit under Section 35F of Central Excise Act, 1944; Error in not filing stay petition before first appellate authority; Need for decision on merits by first appellate authority; Valuation issue regarding non-inclusion of cost of cylinders used for manufacturing labels.

In this judgment by the Appellate Tribunal CESTAT Ahmedabad, the stay petition was filed seeking a waiver of pre-deposit of duty liability, interest, and penalties imposed by the adjudicating authority and upheld by the first appellate authority. The contention was that the appellant did not satisfy the conditions of Section 35F of the Central Excise Act, 1944. The learned counsel argued that there was an error in not filing the stay petition before the first appellate authority and requested permission to file the stay petition before the first appellate authority. The Tribunal noted that the issue needed to be decided by the first appellate authority on its merits. Therefore, after disposing of the stay petition, the appeal itself was taken up for disposal on merits.

During the proceedings, the bench sought clarification on the merits of the case, which were explained by the learned counsel. It was observed that the merits of the case needed to be assessed by the first appellate authority based on the defense presented by the assessee in the grounds of appeal and any supporting evidence. The Tribunal refrained from delving into the merits as the first appellate authority had not provided its findings on the matter. The key issue revolved around valuation, specifically the non-inclusion of the cost of cylinders used in manufacturing labels for customers, which was deemed a question of interpretation and fact.

The Tribunal directed the appellant to deposit a specified amount within a stipulated timeframe and report compliance before the Commissioner (Appeals). Upon compliance, the first appellate authority was instructed to restore the appeal to its original status and decide on the merits without requiring further pre-deposit. Emphasis was placed on adhering to the principles of natural justice throughout the proceedings. Ultimately, the stay petition and appeal were disposed of in accordance with the outlined directives, ensuring a fair and thorough consideration of the case.