2013 (1) TMI 224 - AT - Central Excise

Non-compliance with Section 35F - Non compliance Pre deposit orders and report compliance on time - Held that - Not found prima facie case for the appellant before the Commissioner (Appeals) as most part of the impugned demand resulted from denial of CENVAT credit on trading activity. Prima facie, the assessee could not have staked a good claim before the Commissioner (Appeals) expressing their willingness to pre-deposit 30% of the aforesaid amount. The stand taken by the Commissioner (Appeals) cannot, on principle, be faulted. However, considering the plea of financial hardships, a little more time could have been given to the assessee for making the pre-deposit. Now that much time has elapsed since then, the appellant should be in a position to make pre-deposit of a reasonable amount, thus directed them to pre-deposit an amount of Rs.10/- lakhs within four weeks and report compliance to the Commissioner (Appeals) on or before 7.2.2013, whereupon the Commissioner (Appeals) shall take up the appeal (filed against the order-in-original) for disposal on merits without insisting on pre-deposit of any further amount.

Issues:
- Dismissal of miscellaneous application
- Summary disposal of appeal
- Non-compliance with Section 35F of the Central Excise Act
- Denial of CENVAT credit
- Financial hardships leading to non-compliance
- Prima facie case for the appellant
- Directions for pre-deposit and compliance

Dismissal of Miscellaneous Application:
The miscellaneous application filed by the applicant was dismissed as withdrawn. The Tribunal found it to be a fit case for summary disposal of the appeal after dispensing with pre-deposit.

Summary Disposal of Appeal:
The appeal was directed against the appellate Commissioner's order dismissing the assessee's appeal due to non-compliance with Section 35F of the Central Excise Act. The original authority had denied CENVAT credit, demanded interest, and imposed a penalty. The Commissioner (Appeals) asked the assessee to pre-deposit the entire service tax amount, but the assessee failed to comply, leading to the dismissal of the appeal.

Non-compliance with Section 35F of the Central Excise Act:
The dismissal of the appeal was primarily due to the non-compliance with Section 35F of the Central Excise Act, as the assessee did not pre-deposit the required amount as directed by the Commissioner (Appeals).

Denial of CENVAT Credit:
The impugned demand largely resulted from the denial of CENVAT credit on trading activity. The Tribunal found that the appellant could not have staked a strong claim before the Commissioner (Appeals) regarding the denial of CENVAT credit.

Financial Hardships Leading to Non-compliance:
The assessee cited financial hardships as the reason for not complying with the pre-deposit requirement. While the Tribunal acknowledged the financial difficulties, it directed the appellant to pre-deposit a reduced amount within a specified timeframe.

Prima Facie Case for the Appellant:
Upon reviewing the records and hearing both sides, the Tribunal did not find a prima facie case for the appellant before the Commissioner (Appeals). The Tribunal agreed with the Commissioner (Appeals) that the appellant's claim was not strong.

Directions for Pre-deposit and Compliance:
Considering the plea of financial hardships and other aspects, the Tribunal directed the appellant to pre-deposit a specified amount within a deadline. The Commissioner (Appeals) was instructed to then proceed with the appeal on its merits without requiring any further pre-deposit. The appellant was granted a reasonable opportunity to be heard, and the observations on prima facie case were clarified not to influence the decision of the Commissioner (Appeals). The appeal was allowed by way of remand, and the stay application was disposed of.

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