2012 (7) TMI 819 - AT - Central Excise

Waiver of pre-deposit - Cost Recovery charges - Held that - there is no dispute as to there being no appointment of an officer in the factory premises of the appellant who is an EOU. If that be so, the question of recovery of cost from them may not arise. This is my prima facie view. Since the first appellate authority has not decided the issue on merits and has dismissed the appeal only for non compliance, I do not want to record any finding on the merits of the case. In my view, the appellant has made out a case for waiver of pre-deposit of amounts involved and for hearing and disposing the appeal on merits - Matter remanded back - Decided in favour of assessee.

Summary

Issues involved: Application for waiver of pre-deposit of Cost Recovery charges confirmed by adjudicating authority for an EOU under Warehouse Regulations, 1966.

Analysis:
1. The appellant filed an application seeking a waiver of pre-deposit of confirmed Cost Recovery charges. The first appellate authority had dismissed their appeal due to non-compliance with the pre-deposit order.

2. The judge noted that the issue at hand was narrow and decided to dispose of the appeal while allowing the application for waiver of pre-deposit.

3. The appellant, being an EOU, argued that no officer was permanently posted at their factory premises to claim the Cost Recovery charges. They contended that the charges were calculated for a period when the factory had no commercial production, citing precedents that support the non-demand of Cost Recovery charges in the absence of appointed officers at EOUs.

4. After considering the submissions, the judge observed that there was indeed no appointment of an officer at the appellant's EOU factory premises. Consequently, the judge opined that the recovery of costs from the appellant may not be justified. As the first appellate authority did not address the issue on its merits and dismissed the appeal solely for non-compliance, the judge refrained from making a definitive ruling on the case's merits. The judge found that the appellant had established a case for waiving the pre-deposit and for a thorough consideration of the appeal on its merits.

5. Consequently, the judge set aside the impugned order and remanded the matter back to the first appellate authority for a fresh consideration of the issue without the requirement of pre-deposit. The judge emphasized the importance of the first appellate authority following the principles of natural justice in reaching a conclusion.

6. The appeal was allowed by way of remand, with the decision being dictated and pronounced in court.