2012 (8) TMI 829 - AT - Central Excise

Waiver of pre-deposit of the penalty - Penalty under Rule 26 - Held that - appellant has been charged and adjudicating authority has found that the appellant had issued only invoices for the materials and has not actually cleared the finished goods to the recipient i.e. M/s. Nisha Industries. We find that on 07.08.12 appeal of M/s. Nisha Industries came up before us and in that case also, the first appellate authority had dismissed the appeal for non-compliance. While hearing and disposing the appeal, we had directed M/s. Nisha Industries to deposit some amount and go before the first appellate authority - Conditional stay granted.

Summary

Issues: Stay petition for waiver of pre-deposit of penalty under Rule 26 of Central Excise Rules, 2002; Dismissal of appeal by first appellate authority for non-compliance of pre-deposit; Financial hardship of the appellant.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the stay petition was filed seeking a waiver of pre-deposit of a penalty amounting to Rs.12,94,547 imposed under Rule 26 of the Central Excise Rules, 2002. The Tribunal noted that the appeal could be disposed of immediately as the first appellate authority had dismissed the appeal due to non-compliance with the pre-deposit requirements. Upon reviewing the records, it was found that the appellant had only issued invoices for materials without actually clearing the finished goods to the recipient, M/s. Nisha Industries. The Tribunal had previously directed M/s. Nisha Industries in a separate case to deposit an amount before the first appellate authority. Considering the financial hardships claimed by the appellant, who reported a profit of Rs.3 lakhs for the relevant year, the Tribunal sympathetically directed the appellant to deposit Rs.1,50,000 within eight weeks and appear before the Commissioner for compliance verification. The appeal was to be restored and disposed of on its merits following principles of natural justice. The stay petition and appeal were both disposed of accordingly.

This judgment addresses the issues of seeking a waiver of pre-deposit of penalty, non-compliance leading to appeal dismissal, and the consideration of financial hardship faced by the appellant. The Tribunal emphasized the importance of complying with pre-deposit requirements and ensuring the appellant's appearance before the first appellate authority. Financial difficulties were taken into account, leading to a reduced deposit amount and a specific compliance deadline. The decision reflects a balance between upholding procedural requirements and acknowledging the appellant's circumstances, ultimately aiming for a fair resolution based on the principles of natural justice.