2014 (9) TMI 447 - HC - Central Excise

Waiver of pre-deposit - Goods destroyed in fire - Remission application dismissed - demand of duty confirmed - Tribunal held that as remission of duty was dismissed therefore, demand is sustainable - Held that - From the recording made by the Tribunal relating to the submissions advanced by the respective parties, it appears that the petitioner took a specific plea that the order passed on an application for remission of duty and the order passed on confirmation of the demand is different, separate, distinct and cannot be mingled - On perusal of the provisions contained under Rule 21 of the Central Excise Rules, 2002, this Court finds that the consideration for the said application is different and, therefore, the said order cannot be linked to the order passed on confirmation of the demand. Furthermore the consideration for application seeking waiver of the pre-condition deposit is well recognized, as in such case the authorities must record their satisfaction relating to the undue hardship and while doing so shall also take into account the interest of the Revenue. Tribunal has proceeded to decide the matter extraneously without recording any satisfaction relating to the existence of a prima facie case, irreparable loss and injury, balance of convenience and inconvenience and undue hardship, which are some of the illustrative ingredients for consideration of the said application - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to CESTAT order for deposit, rejection of remission of duty application, appeal against duty imposition, waiver of pre-deposit application, satisfaction for waiver, linkage of orders, undue hardship consideration, re-consideration by Tribunal.

Analysis:
The petitioner challenged the CESTAT order directing a 25% duty deposit within 8 weeks. The petitioner's factory faced a fire resulting in goods destruction, leading to a remission of duty application. The department issued a notice for duty assessment and demand confirmation, which were disposed of separately. The petitioner did not challenge the remission rejection, claiming it was an executive order. The appeal was against duty confirmation. The Tribunal rejected the waiver application, citing finality due to remission rejection. The petitioner argued the orders were distinct. The Court found the remission order separate and not linked to the duty confirmation. The Tribunal's satisfaction for waiver lacked consideration of undue hardship and revenue interest. The petitioner's submissions on undue hardship were noted. The Court found the Tribunal decided without assessing prima facie case, irreparable loss, balance of convenience, and undue hardship. The impugned order was quashed, remitted to the Tribunal for re-consideration within three weeks. The writ petition was disposed of without costs.