2015 (10) TMI 693 - HC - Central Excise

Waiver of pre deposit - Financial hardship - Held that - Justice would be rendered in the event the appellant is directed to deposit an amount of ₹ 16.00 lakhs as pre-deposit and this shall be made within a period of fortnight from the date of receipt of a copy of this order. If such deposit is made within the above time, the appeal will be heard out by the learned Tribunal on merit as and when possible, failing which, the appeal before the Tribunal will automatically stand dismissed - Decided conditionally in favour of assessee.

Summary

Issues:
1. Consideration of financial hardship by the Tribunal
2. Reversal of credit taken by the appellant
3. Disposal of appeal by the High Court

Consideration of Financial Hardship by the Tribunal:
The High Court admitted the appeal based on substantial questions of law related to the Tribunal's consideration of the appellant's financial hardship. The Court directed the Tribunal to re-examine the issue, taking into account fresh material, specifically the balance sheet for the year ending 31-3-2014. The Tribunal's decision on financial hardship was criticized for not properly considering the audited balance sheet presented, leading to a conclusion contrary to the financial reality of the appellant. The Court emphasized that audited accounts are reliable and cannot be doubted, highlighting a net loss in the profit and loss account as of 31-3-2014. The Tribunal's finding of a profit exceeding Rs. 13.00 crores was deemed erroneous, and the Court asserted that the company was likely to face financial hardship in the current financial year. Consequently, the Court directed the appellant to deposit Rs. 16.00 lakhs within a fortnight for the appeal to be heard on merit by the Tribunal.

Reversal of Credit Taken by the Appellant:
The High Court questioned the Tribunal's decision regarding the reversal of credit taken by the appellant, emphasizing that the debit and credit in the same account nullified each other without any financial gain to the appellant or loss to the Revenue. The Tribunal's assumption that the credit needed to be reversed was challenged, with the Court pointing out that the amount did not represent any duty of excise. The Court highlighted the need for a proper assessment of the financial implications before requiring such reversals, indicating a lack of gain or loss in the transaction.

Disposal of Appeal by the High Court:
The High Court disposed of the appeal, considering the material available and presented before it. The Court noted the appellant's previous challenge to the Tribunal's order on waiver of pre-deposit and directed the Tribunal to re-evaluate the financial hardship issue based on the fresh material provided. Despite the Tribunal's initial refusal to grant relief for pre-deposit waiver, the High Court found the Tribunal's decision to be contrary to the audited balance sheet of 31-3-2014. Ultimately, the Court ordered the appellant to make a pre-deposit of Rs. 16.00 lakhs within a specified timeframe for the appeal to proceed, failing which the appeal would stand dismissed. The judgment concluded by disposing of the case and closing any pending miscellaneous applications without imposing any costs.