2017 (2) TMI 99 - HC - Central Excise

Pre-deposit - section 35F of the Central Excise Act, 1944 - Before amendment an appellant had to deposit the entire duty and penalty. The first proviso to Section 35F provided that in case of undue hardship the tribunal might dispense with the whole or part of the said deposit. In respect of the first assessment order the petitioner had to deposit ₹ 2.5 crores on application of the 50% deposit principle with some variation in it made by this Court and in respect of the other two assessments orders, it had to make deposit of 7.5% of the duty - There cannot be different rates of pre-deposit identical facts and identical findings with regard to it, the applicable law remaining the same. A direction upon the tribunal to reconsider the question of pre-deposit of the impugned assessment order - petition allowed by way of remand.

Issues involved:
1. Interpretation of Section 35F of the Central Excise Act, 1944 before and after amendment.
2. Application of the principle of undue hardship in deposit of duty and penalty pending appeal.
3. Discrepancy in pre-deposit amounts ordered by the tribunal for different assessment orders.
4. Reconsideration of pre-deposit amounts in light of consistent application of the law.

Analysis:
1. The judgment primarily deals with the interpretation of Section 35F of the Central Excise Act, 1944 before and after its amendment. The court discussed the requirement for appellants to deposit duty and penalty pending appeal, focusing on the provision allowing the tribunal to dispense with the deposit in case of undue hardship. Reference was made to previous judgments highlighting the importance of a strong prima facie case in determining undue hardship. The court also noted the amendment to Section 35F, which mandated a specific percentage of duty or penalty to be deposited before filing an appeal.

2. The issue of undue hardship in depositing duty and penalty pending appeal was examined in the context of the case. The court considered the appellant's argument regarding the immovable sub-structure for cooling towers and the excise department's view on the duty payable. The tribunal had initially reduced the pre-deposit to 50% without any financial hardship being presented. However, the subsequent orders for different assessment years required a 7.5% pre-deposit. The court addressed the discrepancy in pre-deposit amounts and the need for consistency in applying the law.

3. A discrepancy in the pre-deposit amounts ordered by the tribunal for different assessment orders was highlighted by the petitioner's counsel. The court acknowledged the inconsistency in requiring a 50% pre-deposit for the first assessment order while mandating a 7.5% pre-deposit for the subsequent assessment orders. This discrepancy raised concerns about the uniform application of the law to similar cases with identical facts and findings.

4. The judgment concluded by directing the tribunal to reconsider the pre-deposit amount for the initial assessment order in line with the consistent application of a 7.5% pre-deposit for other assessment orders. The court set aside the previous orders related to pre-deposit and instructed the tribunal to make a decision within three months after giving the petitioner an opportunity to be heard. The petitioner was directed to retain the specified amount in a fixed deposit pending further orders from the tribunal based on the court's decision.

In summary, the judgment addressed the interpretation of Section 35F of the Central Excise Act, the application of the undue hardship principle, the discrepancy in pre-deposit amounts ordered by the tribunal, and the need for consistency in applying the law to similar cases.

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