2013 (3) TMI 26 - AT - Central Excise

Non-compliance of provisions of section 35F of Central Excise Act, 1944 - Held that - On going through the records it is find that assessee have enclosed a copy of GR-7 Challan wherein entire directed amount has been deposited by them Commr. (Appeal) has dismissed the appeal for non-compliance with the Provisions of Section 35F as applicable to Finance Act, 1994 by virtue of Section 83 of the Finance Act, 1994 and without affording an effective hearing to the appellant the order passed is set aside and the matter is remanded back for deciding the issue afresh without insisting for any pre deposit from the appellant

Summary

Issues: Application for waiver of pre-deposit of penalty under Section 76 of the Finance Act, 1994; Dismissal of appeal by Commissioner (Appeal) for non-compliance with Section 35F and lack of effective hearing.

Analysis:
The case involves an application seeking waiver of pre-deposit of penalty amounting to Rs.1,76,000 imposed under Section 76 of the Finance Act, 1994. The appellant had paid Service Tax on GTA services erroneously using Cenvat Credit for January and February 2009. Upon realization of the error, the appellant paid the entire Service Tax amount of Rs.4,22,785 along with interest on 5th May, 2010 and informed the Department. Subsequently, a Show Cause Notice proposing penalty under Section 76 was issued. The Ld. Consultant contended that the Commissioner (Appeal) passed an ex parte order without providing them with an effective hearing, which was reiterated by the Ld. A.R. representing the respondents.

Upon hearing both sides, the Tribunal found that the appeal could be disposed of without the need for pre-deposit of the penalty amount. It was observed that the Commissioner (Appeal) had dismissed the appeal citing non-compliance with the provisions of Section 35F as per the Finance Act, 1994, under Section 83, without granting the appellant a fair hearing. Consequently, the Tribunal set aside the order of the Commissioner (Appeal) and remanded the matter back for a fresh decision, directing the Commissioner (Appeal) to decide the issue without insisting on any pre-deposit from the appellant. The Tribunal emphasized the need for affording a reasonable opportunity of hearing to the appellant, allowing the appeal by way of remand. The judgment was pronounced in open court, thereby resolving the issue at hand.