2013 (12) TMI 1189 - AT - Central Excise

Restoration of Appeal - Waiver of Pre-deposit Official Liquidator contended that there is not enough assets of the company to meet the full liabilities of the company, thus payment of amount due to one party even before disposal of appeal will be prejudicial to the interests of other creditors Held that - Considering the winding up process which is under way and the fact that the amount involved is interest on duty which is already paid - lenient view to be taken in the matter and waive pre-deposit of the dues Pre-deposits waived till the disposal Application for Restoration of Appeal allowed and Stay granted.

Summary

Issues:
Interest on duty paid later than due date; Demand and confirmation of interest against a company; Application for waiver of pre-deposit; Dismissal of appeal for non-compliance with Section 35F of the Central Excise Act; Official liquidator's application for waiver of pre-deposit; Opposing arguments on pre-deposit waiver; Consideration of pre-deposit waiver by the Tribunal.

The judgment involves a case where interest on duty paid later than the due date, amounting to Rs.5,39,711, was demanded and confirmed against a company, leading to the filing of an appeal before the Tribunal. The Tribunal initially passed a stay order directing the company to pre-deposit a certain amount, which the company failed to comply with, resulting in the dismissal of the appeal. Subsequently, the official liquidator, appointed for the company under liquidation, filed an application before the High Court pleading that the dismissal of the appeal would cause injustice to the company and other creditors. The High Court, in its order, closed the application with liberty given to the official liquidator to approach the concerned authority for dispensing with compliance of Section 35F of the Central Excise Act.

The official liquidator then filed an application seeking waiver of pre-deposit, arguing that there were insufficient assets to meet the company's liabilities fully, and pre-deposit would prejudice other creditors. In response, the Revenue's representative opposed the waiver, contending that interest on a liability admitted and paid by the applicant cannot be waived, even in the case of a company under liquidation. The Revenue relied on a previous decision to support its argument.

Considering the arguments from both sides, the Tribunal, noting the involvement of the Commissioner of Central Excise as a respondent in the appeal before the High Court, decided to take up the application for waiver of pre-deposit sympathetically. Given the small amount involved and the ongoing winding-up process, the Tribunal recalled the previous stay and dismissal orders and waived the pre-deposit of the dues for admission of the appeal, staying the collection during the appeal's pendency. The Tribunal allowed the stay petition and the application for restoration of the appeal, demonstrating a lenient view in the matter.

In conclusion, the Tribunal, after considering the unique circumstances of the case and the interests of all parties involved, granted the waiver of pre-deposit and allowed the appeal to proceed without insisting on the pre-deposit amount, ensuring fairness and justice in the proceedings.