2015 (5) TMI 376 - HC - Central Excise

Waiver of pre deposit - tribunal ordered 50% amount to be deposited - prima facie case - undue hardship - Denial of CENVAT Credit - contravention of the provisions of Rule 4 of the Central Excise Rules, 2002 - Confiscation of goods - Held that - CESTAT has found some substance in the contention of the appellant and has directed him to predeposit only 50% of the duty demand confirmed against the appellant and not the entire 100% of the amount. It can thus be seen from the facts and circumstances of the present case that the learned CESTAT has taken into consideration all the three factors i.e. prima facie case, undue hardship and the interest of Revenue. - Insofar as the factor i.e. undue hardship is concerned, it does not appear that the said contention was duly established by the appellant by producing sufficient evidence before the learned Tribunal. We do not find any error in the findings recorded by the learned Tribunal in the impugned order. - No case is made out for the interference at the hands of this Court as there is no substantial question of law involved in the present appeal for consideration of this Court - Decided against assessee.

Summary

Issues Involved:
1. Validity of the pre-deposit order by CESTAT.
2. Opportunity for cross-examination.
3. Compliance with principles of natural justice.
4. Financial hardship claim by the appellant.

Detailed Analysis:

1. Validity of the Pre-Deposit Order by CESTAT:
The appellant challenged the CESTAT's order directing a pre-deposit of 50% of the duty demand within eight weeks. The Tribunal's decision was based on the findings of the Commissioner of Central Excise, which confirmed the recovery of wrongly availed CENVAT credit amounting to Rs. 96,31,754/-. The Tribunal considered various aspects, including the appellant's malpractice and the need to protect revenue interests. The court upheld the Tribunal's discretion, noting it was exercised appropriately and not in a perverse manner.

2. Opportunity for Cross-Examination:
The appellant argued that the Commissioner of Central Excise should have allowed cross-examination of Mr. Kevalchand G. Jain, the broker, and other relevant officials. The Tribunal found that the denial of cross-examination did not prejudice the appellant, as the case against them was established based on substantial evidence, including statements and documents. The court supported this view, citing that the principles of natural justice were not violated as the evidence was sufficient to support the findings without cross-examination.

3. Compliance with Principles of Natural Justice:
The appellant contended that the principles of natural justice were breached due to the denial of cross-examination. The court referred to the Supreme Court's judgment in K.L. Tripathi Vs. State Bank of India & Ors, which stated that cross-examination is not an integral part of quasi-judicial adjudication unless prejudice is proven. The court concluded that no prejudice was caused to the appellant, as the Octroi firm involved was found to be non-existent, and the findings were based on substantial evidence.

4. Financial Hardship Claim by the Appellant:
The appellant claimed financial hardship, stating that their factory was under closure, making the pre-deposit difficult. The Tribunal, however, found no substantial evidence to support this claim. The court emphasized that while considering waiver applications, factors like prima facie case, undue hardship, and revenue interest must be balanced. The Tribunal had correctly considered these factors and directed a 50% pre-deposit, which was deemed reasonable and not excessive.

Conclusion:
The court dismissed the appeal, finding no substantial question of law for consideration. It upheld the Tribunal's order, emphasizing that the Tribunal had appropriately balanced the interests of justice and revenue. The observations were limited to the pre-deposit order, and the Tribunal was directed to hear the appeal on its merits after the appellant complied with the pre-deposit directive.