2017 (3) TMI 125 - AT - Central Excise

Pre-deposit - whether the mandatory deposit of 7.5% as per Section 35F (i) of the CEA is required to be made in cash or the same can be paid by utilizing CENVAT credit account maintained by the appellant? - Held that - the view taken by the lower appellate authority that the deposit u/s 35F (i) cannot be made from CENVAT credit account, is not correct interpretation of law as long as the CENVAT credit is permitted for utilization under Rule 3 (4) of the CCR, 2004 - appeal remanded to decide the case on merits - appeal allowed by of remand.

Summary

Issues involved:
Interpretation of Section 35F (i) of the Central Excise Act regarding mandatory deposit for filing an appeal.

Detailed Analysis:

1. Issue: Interpretation of Section 35F (i) regarding mandatory deposit for filing an appeal.

- The appeal was filed against the Order-in-Appeal dated 15.03.2016, where the lower appellate authority required a mandatory predeposit of duty under Section 35F (i) of the Central Excise Act, 1944.

- The appellant argued that the predeposit was made from their un-utilized CENVAT credit account, which was permissible under Rule 3 (4) of the Cenvat Credit Rules, 2004.

- The lower appellate authority dismissed the appeal for failure to deposit the mandatory amount in cash, stating that payment from the CENVAT credit account was not acceptable.

- The Tribunal analyzed the provisions of Section 35F (i) and Rule 3 (4) of the Cenvat Credit Rules, 2004. It concluded that as long as CENVAT credit is permitted for utilization, the mandatory deposit could be made from the CENVAT account.

- The Tribunal directed the Commissioner (Appeals) to reconsider the case on merit without insisting on any further predeposit in cash. Both parties were given the opportunity to present evidence, and all issues were kept open for further consideration.

- The Tribunal allowed the appeals by way of remand, setting aside the impugned order and remitting the matters to the Commissioner (Appeals) for a fresh decision on merit.

This detailed analysis provides a comprehensive understanding of the judgment, focusing on the interpretation of Section 35F (i) of the Central Excise Act and the permissibility of utilizing CENVAT credit for the mandatory deposit. The Tribunal's decision to remand the case for a reconsideration on merit without requiring additional cash predeposit highlights the importance of legal interpretation in tax matters.