2014 (8) TMI 434 - AT - Central Excise

Waiver of pre deposit of duty - default in payment of Central Excise duty under Rule 8 of Central Excise Rules 2002 - Interest for defaulted period - Held that - As a result of occurrence of default appellant was required to pay duty from PLA consignment-wise which was not done. Subsequently out of the total amounts involved appellant has deposited an amount of ₹ 42 ,02,524 /- towards payment required to be made in cash. First appellate authority should have taken these aspects into account while ordering pre-deposit. A deposit of ₹ 58 lakhs ordered by the first appellate authority is, therefore, excessive. In the interest of justice, appellant is directed to deposit an amount of ₹ 2 lakhs (Rupees Two Lakhs only) with respect to these two appeals within four weeks from the date of this order and report compliance to Commissioner (Appeals) - Matter remanded back conditionally.

Summary

Issues:
1. Default in payment of Central Excise duty under Rule 8 of Central Excise Rules 2002.
2. Consideration of duty paid through challans for waiver of pre-deposit.
3. Liability for interest on duty paid from CENVAT account till cash payment.
4. Excessive pre-deposit amount ordered by the first appellate authority.

Issue 1: Default in payment of Central Excise duty under Rule 8 of Central Excise Rules 2002:
The appellant filed stay applications and appeals against OIA No.DMN-EXCUS-000-APP-012 & 013-14-15, where the first appellate authority dismissed the appeals due to non-compliance of pre-deposit orders. The appellant argued that the default in payment of duty was under Rule 8 of Central Excise Rules 2002, and they had cleared goods by discharging duty liability from the CENVAT Credit account. The appellant contended that the duty paid through challans should be considered for waiver of pre-deposit, citing a judgment from CESTAT Delhi. The Revenue argued that interest should be paid from the date of duty payment from the CENVAT account till the cash payment.

Issue 2: Consideration of duty paid through challans for waiver of pre-deposit:
The Tribunal noted that the appellant had deposited an amount towards the required cash payment. The first appellate authority was criticized for not considering this while ordering pre-deposit. The Tribunal found the ordered pre-deposit of Rs. 58 lakhs excessive and directed the appellant to deposit Rs. 2 lakhs within four weeks for the appeals to be restored to the first appellate authority for consideration on merits. The Tribunal clarified that it had not expressed any opinion on the case's merits, leaving all issues open for the first appellate authority to deliberate upon.

Issue 3: Liability for interest on duty paid from CENVAT account till cash payment:
The Revenue argued that interest should be paid on the duty amount paid from the CENVAT account until the cash payment was made. However, the Tribunal did not provide a specific ruling on this issue in the judgment.

Issue 4: Excessive pre-deposit amount ordered by the first appellate authority:
The Tribunal found the pre-deposit amount ordered by the first appellate authority to be excessive and directed the appellant to deposit a reduced amount of Rs. 2 lakhs within a specified timeframe. The appeals were allowed by way of remand to the first appellate authority for further consideration.

In conclusion, the Tribunal allowed the appeals by remanding them to the first appellate authority for a fresh consideration on merits, emphasizing the need for a reduced pre-deposit amount and leaving all issues open for further deliberation.