2015 (4) TMI 423 - HC - Central Excise

Waiver of pre deposit - Whether in the instant case the direction of the CESTAT to deposit 5 crores as pre-condition for the hearing of the appeal was justified - interdependent and integrated plants for manufacturing sugar and alcohol. - availing cenvat credit while availing exemption in respect of Rectified Spirit (RS) Absolute Alcohol (AA) Extra Neutral Alcohol (ENA) all conforming to the alcohol volume in excess of 95%. - Held that - As noticed by the Bombay High Court in its rulling in Niphad Sakhar (2014 (1) TMI 1384 - BOMBAY HIGH COURT) all the tariff entries w.e.f. 01.03.2005 and the consequent exemption notification have resulted in a different regime. Even otherwise the submission made by the revenue to the effect might be startling consequent prima facie on the logic which appeals to the Bombay High Court comment for acceptance of this Court. As a result the impugned direction to deposit 5 crores is hereby set aside - Decided in favour of assessee.

Summary

Issues:
1. Justification of the direction to deposit Rs. 5 crores as a pre-condition for hearing the appeal.

Analysis:
The appellant, a composite manufacturing unit producing sugar and alcohol, sought the benefit of a notification for certain alcohol products. The Excise authorities issued a Show Cause Notice challenging the exemption and denying cenvat credit. The appellant's responses led to an adverse order, prompting an appeal to the CESTAT, which required a deposit of Rs. 5 crores for the appeal to be heard. The appellant argued that the direction was unjustified, citing a Bombay High Court order for guidance. The High Court noted that the revenue's argument was inconsistent with the notification and the prevailing regime. Consequently, the direction to deposit Rs. 5 crores was set aside, and the appeal was allowed to proceed on its merits.

This case raised the issue of whether the direction to deposit Rs. 5 crores as a pre-condition for hearing the appeal was justified. The appellant's manufacturing unit faced challenges regarding excise exemptions and cenvat credit, leading to an adverse order and an appeal to the CESTAT. The High Court, guided by a Bombay High Court order, found the revenue's arguments inconsistent with the notification and prevailing regime. As a result, the direction to deposit Rs. 5 crores was deemed unjustified, allowing the appeal to proceed on its merits.