2015 (7) TMI 1380 - HC - Central Excise

Maintainability of appeal - non-compliance with regard to pre-deposit under Section 35F of the Central Excise Act, 1944 - Commission Agent - HELD THAT - If the Appellant was a Commission Agent and for that reason it had been granted complete waiver of pre-deposit on similar allegations, there had to be some justification for differential treatment in the order dated 22-1-2014. This was a fundamental aspect for justice not only to be done but also to appear to have been done. The matter is remanded to the Tribunal for consideration both on the issue of undue hardship pleaded and also the aspect for complete waiver of pre-deposit granted to it in similar circumstances considering its status as a Commission Agent - appeal allowed by way of remand.

Summary

Issues involved:
1. Non-compliance with pre-deposit under Section 35F of the Central Excise Act, 1944.
2. Consideration of undue hardship and differential treatment in granting complete waiver of pre-deposit.

Issue 1: Non-compliance with pre-deposit under Section 35F:
The appellant challenged the order of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, which dismissed their appeal due to non-compliance with the pre-deposit requirement under Section 35F of the Central Excise Act, 1944. The appellant was directed to deposit a sum of Rs. 1,00,000 within six weeks. The appellant argued that the undue hardship mentioned in their stay application was not adequately considered before the order was passed. They also pointed out a previous order where they were granted a complete waiver of pre-deposit for similar reasons, which was not taken into account during the decision-making process.

Issue 2: Consideration of undue hardship and differential treatment:
The appellant's counsel contended that the Tribunal did not properly consider the undue hardship claimed by the appellant before issuing the order. They highlighted that the Tribunal merely accepted the Revenue's argument that the company was financially sound without sufficient analysis. Moreover, the appellant was granted a complete waiver of pre-deposit in a previous order due to their status as a Commission Agent, which was not considered in the decision under challenge. On the other hand, the respondent argued that the appellant did not bring to the Tribunal's attention the previous orders where they were granted a waiver of pre-deposit. The respondent also claimed that the issue of undue hardship was adequately addressed in the order in question.

The High Court, after considering the submissions from both sides, held that if the appellant was granted a complete waiver of pre-deposit in a previous order due to their status as a Commission Agent, there should have been a justification for the differential treatment in the order under challenge. The Court emphasized the importance of not only doing justice but also ensuring that justice appears to have been done. Consequently, the Court set aside the orders dated 22-1-2014 and 29-9-2014 and remanded the matter back to the Tribunal for a reevaluation. The Tribunal was instructed to reconsider the issue of undue hardship raised by the appellant and the complete waiver of pre-deposit granted in similar circumstances, taking into account the appellant's status as a Commission Agent. Ultimately, the Court allowed the appeal in favor of the appellant.