2014 (10) TMI 757 - HC - Central Excise

Waiver of pre deposit - Wrong claim of SSI Exemption - Quantum of pre-deposit made - Tribunal ordered the assessee to deposit 25% of duty - Held that - keeping in view the totality of the facts and circumstances of the case coupled with the fact that the appellant has already deposited a sum of ₹ 25 lacs in terms of the order dated 14.8.2014, we are of the opinion that the ends of justice would be met if the Tribunal is directed to hear the appeal on merits without insisting for pre-deposit of the remaining amount - Decided in favour of assessee.

Summary

Issues:
1. Whether the Tribunal was justified in ordering the appellant to deposit 25% of duty along with proportionate interest without considering the merits of the case?
2. Whether the Tribunal was justified in ordering the deposit when the appellant had a strong prima facie case on merits, financial grounds, and limitation?

Analysis:

Issue 1:
The appellant appealed under Section 35G of the Central Excise Act against the Tribunal's order directing a pre-deposit of 25% of the duty along with proportionate interest without considering the case's merits. The appellant, engaged in the manufacture of Potassium Titanate, had a complex history of operations and compliance with excise duty regulations. Despite various submissions and actions taken by the appellant in response to regulatory requirements and objections, a show cause notice was issued, leading to a demand confirmation of Rs. 80.24 lakhs along with penalties and interest. The Tribunal's order for the pre-deposit was challenged as unfair and excessive by the appellant's counsel, arguing that a partial deposit had already been made. Ultimately, the High Court directed the Tribunal to hear the appeal on merits without insisting on further pre-deposit, considering the appellant's compliance efforts and the amount already deposited.

Issue 2:
The second issue revolved around whether the Tribunal's order for the deposit was justified given the appellant's strong prima facie case on merits, financial grounds, and limitation. The appellant's counsel contended that the Tribunal's directed amount was reasonable and justified, opposing the appellant's plea to proceed with the appeal without additional deposit. The High Court, after considering the arguments from both sides and the appellant's compliance efforts, found that the ends of justice would be served by allowing the appeal to be heard on merits without the requirement of further pre-deposit. Consequently, the High Court disposed of the appeal accordingly, directing the Tribunal to proceed with the appeal hearing without insisting on the remaining deposit amount.