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2013 (10) TMI 1196 - HC - Central ExciseValidity of Pre-deposits ordered - classification of Denatured Ethyl Alcohol and Ethyl Alcohol (rectified spirit) out of duty paid Molasses. - Whether the Tribunal was correct in directing the appellant to deposit an amount of Rs.34 lakhs for hearing the appellant s appeal on merits when the issue in dispute is covered in appellant s favour by decision of the Tribunal in the matter of Ugar Sugar Works Limited vs. Commissioner of Central Excise 2007 (4) TMI 31 - CESTAT,BANGALORE Held that - In 2005 the Central Excise Tariff Act 1985 was restructured The case of the revenue is that prior to restructuring of the tariff, Ethyl Alcohol was an excisable goods as it found mention in the tariff but not after restructuring of the tariff. The Tribunal in the matter of Ugar Sugar Works Ltd. seems to have dealt with the period post 2005. When the basic defence of the appellant is the decision of Tribunal in Ugar Sugar Works Ltd., the Tribunal ought to have dealt with the same - This is particularly so as it goes to the root of the dispute order set aside and the Tribunal is directed to decide the stay application afresh Decided in favour of Assessee.
Issues:
1) Challenge to Tribunal's order directing pre-deposit for hearing the appeal. 2) Interpretation of Cenvat Credit Rules in relation to duty on molasses. 3) Applicability of Tribunal's decision in Ugar Sugar Works Ltd. case. 4) Consideration of pre-deposit requirement under Section 35F of the Act. Analysis: 1) The appellant challenged the Tribunal's order directing a pre-deposit of Rs.34 lakhs out of a duty demand of Rs.1.22 crores for hearing the appeal. The appellant contended that the issue in dispute was covered in their favor by a previous decision of the Tribunal in Ugar Sugar Works Ltd. case. The period involved in the appeal was April 2011 to June 2012. 2) The appellant, engaged in the manufacture of Denatured Ethyl Alcohol and Ethyl Alcohol, had taken cenvat credit of duty paid on molasses used in manufacturing final products. The revenue disputed this credit, claiming that Ethyl Alcohol was non-excisable, leading to a demand for the credit taken on molasses. The Adjudicating authority upheld the demand and penalty, stating that Ethyl Alcohol was subject to State Excise levy, not Central Excise levy. 3) The Tribunal's decision in Ugar Sugar Works Ltd. case was crucial, as it addressed the restructuring of the Central Excise Tariff Act in 2005, impacting the excisability of Ethyl Alcohol. The appellant argued that the Tribunal's decision supported their case, but the Tribunal did not consider this in the pre-deposit order, leading to the appeal. 4) The High Court set aside the Tribunal's order, directing a fresh consideration of the stay application. The Court emphasized that the Tribunal should assess the applicability of the Ugar Sugar Works Ltd. decision to the current case before determining the pre-deposit amount. Both parties were given the opportunity to present their contentions afresh before the Tribunal. In conclusion, the High Court's judgment focused on the proper consideration of legal precedents, particularly the Tribunal's previous decisions, in determining the pre-deposit requirement for hearing the appeal. The Court emphasized the need for a thorough evaluation of the relevant legal principles and directed a fresh assessment by the Tribunal, ensuring all arguments were duly considered.
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