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2012 (5) TMI 534 - AT - Central ExciseViolation of principle of natural justice - Commissioner appeal did not pass speaking order - Held that - Going through the stay order dated 25-7-2011 and the Board s Circular as stated hereinabove along with observation of the Hon ble Bombay High Court in the 1999 (4) TMI 81 - HIGH COURT OF JUDICATURE AT BOMBAY , wherein it was held that the Commissioner (Appeals) while dealing with stay application has not passed a speaking order. Therefore, the order of the pre-deposit is in violation of the principles of natural justice, consequently the impugned order will not sustain in the eyes of law. Accordingly, we set aside the impugned order with a direction to the Commissioner (Appeals) to decide the stay application first by passing a speaking order thereafter applicants are required to make pre-deposit - Decided in favour of assessee.
Issues involved:
Appeal dismissal for non-compliance with pre-deposit requirements under Section 35F of the Central Excise Act, 1944 and Section 83 of the Finance Act, 1994. Analysis: The appellants filed an appeal along with a stay application seeking waiver of the dues adjudged in the impugned order. The learned Counsel argued that the appeal was dismissed by the Commissioner (Appeals) due to non-compliance with pre-deposit provisions, contending that the stay order did not include a speaking order for requesting pre-deposit, violating Circular No. 524/20/2000-CX. They cited precedents like CEAT Ltd. v. Union of India and Velcord Textiles v. Union of India to support their argument. They requested setting aside the impugned order and remanding the matter for a proper pre-deposit order before deciding on the appeal's merits. The Respondent, represented by the learned A.R., opposed these contentions, stating that the Revenue had a strong case, and although the impugned order was not based on merit, the appellants should make a pre-deposit before a reasoned order on merit could be passed. Upon hearing both sides, the Tribunal examined the stay order issued by the Commissioner (Appeals) on 25-7-2011, which required a substantial pre-deposit. The Tribunal noted that the Circular issued by the C.B.E. & C. emphasized the necessity of passing speaking orders while dealing with stay applications, which the Commissioner (Appeals) failed to do in this case. Referring to the decisions of the Hon'ble Bombay High Court in CEAT Ltd. and Velcord Textiles cases, the Tribunal highlighted the importance of reasoned orders in such matters. Citing the violation of principles of natural justice due to the absence of a speaking order, the Tribunal set aside the impugned order and directed the Commissioner (Appeals) to first decide the stay application by passing a speaking order. Once the pre-deposit is made in compliance with the speaking order, the Commissioner (Appeals) can then proceed to decide on the appeal's merits. In conclusion, the Tribunal waived the pre-deposit requirement, remanding the matter back to the Commissioner (Appeals) for further proceedings in accordance with the observations made regarding the necessity of a speaking order for pre-deposit determination before addressing the appeal's substantive merits.
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