2015 (10) TMI 727 - HC - Central Excise

Waiver of pre deposit - Undue hardship - Section 35F - classification of Tobacco Dust/Refuse mixed with lime combined with water packed in pouches - Held that - Division Bench of the Madras High Court in the case of (2013 (4) TMI 203 - MADRAS HIGH COURT) did consider fresh materials placed before it and opined to grant appropriate relief rather than remanding the matter to the Tribunal but the facts of the present case are completely distinguishable from the nature of conduct attributable to the appellant himself when the Tribunal has granted indulgence to it on more than one occasion. Likewise, in the case of M/s. Prosafe International, the subsequent amendment on 6-8-2014 in Section 35F was considered while granting relief as virus of the enactment was under challenge which is not the case presently. Even otherwise, we are not persuaded to give a retrospective effect to a legislation expressly made prospective in nature and that too while considering a limited issue against an interim order. The readiness to deposit at 7 % of duty assessed appears incongruous to the earlier stand of the appellant that come what may it was not in a position to deposit anything. - if the pre-deposit amount as directed on 7-9-2012 is deposited along with interest at the rate of 9% per annum from 7-9-2012 within a maximum period of 30 days from today, the Tribunal shall proceed to adjudicate the appeal on merits - Partial stay granted.

Summary

Issues:
1. Appeal against order of Customs, Excise & Service Tax Appellate Tribunal.
2. Failure to comply with interim order for waiver of pre-deposit under Section 35F of the Central Excise Act.
3. Classification of goods for levy of Excise duty.
4. Application for modification of order for waiver of pre-deposit.
5. Application for rectification of mistaken order.
6. Interpretation of Section 35F of the Act.
7. Consideration of undue hardship for waiver of pre-deposit.
8. Review jurisdiction of the Tribunal.
9. Compliance with Tribunal orders.
10. Application of case laws on undue hardship.

Analysis:

1. The appellant challenged the order of the Customs, Excise & Service Tax Appellate Tribunal, which declined to interfere with its earlier order dismissing the appeal due to non-compliance with the interim order for waiver of pre-deposit under Section 35F of the Central Excise Act.

2. The appellant disputed the classification of goods for levy of Excise duty, claiming that undue hardship was caused by the Tribunal's failure to consider the classification issue while deciding on the waiver of pre-deposit.

3. The Tribunal's order for waiver of pre-deposit was found to be well-reasoned, considering the appellant's failure to demonstrate financial hardship adequately. The Tribunal displayed fairness by granting an extension for deposit and considering subsequent applications despite non-compliance.

4. The Tribunal's refusal to review or modify the order was upheld, emphasizing that the appellant failed to provide substantial evidence of undue hardship. The Tribunal rightly rejected the rectification application as the assessment of duty was specific to the appeal under consideration.

5. The Court interpreted Section 35F of the Act, emphasizing that waiver of pre-deposit cannot be granted as a matter of course and must consider the interest of revenue. The appellant's repeated non-compliance raised doubts about the claim of financial constraints.

6. Case laws on undue hardship were cited, highlighting the need for applicants to establish undue hardship with concrete evidence. The Court directed compliance with the pre-deposit amount along with interest to proceed with the appeal on merits, similar to precedents.

7. The Court dismissed the appeal, affirming the Tribunal's decisions and conditional directions based on the appellant's conduct, lack of demonstrated undue hardship, and failure to comply with orders. The judgment emphasized the importance of following statutory provisions and demonstrating genuine hardship for waivers.