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2017 (9) TMI 1543 - AT - Central ExcisePre-deposit - whether mandatory deposit of seven and half percent as per Section 35F (i) of the Central Excise Act 1944 is required to be paid in cash or the same can be paid from CENVAT Credit Account maintained by the appellants? - Held that - It is observed from the provisions of Section 35F (i) that it is not specifically mentioned that amount has to be deposited only by way of cash payment - the view taken by the First Appellate Authority that deposit under Section 35F (i) cannot be made from CENVAT Credit Account is not the correct appreciation of law so long as the CENVAT Credit is permissible for utilisation as per Rule 3(4) of the CCR 2004 - matter remanded to the First Appellate Authority with directions to decide the appeals on merits - appeal allowed by way of remand.
Issues: Interpretation of Section 35F of the Central Excise Act, 1944 regarding mandatory deposit for filing appeals.
Analysis: The appeals were filed against Order-in-Appeal Nos.06/KOL-II/2016, 09/KOL-II/2016 & 07/KOL-II/2016 passed by the Commissioner(Appeal-I) of Central Excise, Kolkata. The issue revolved around whether the mandatory deposit of seven and a half percent, as per Section 35F (i) of the Central Excise Act 1944, needed to be paid in cash or could be paid from the CENVAT Credit Account maintained by the appellants. The appellant argued that the amended Section 35F did not specify that the deposit had to be made in cash only. The First Appellate Authority had previously held that the deposit could not be made from the CENVAT Credit Account. However, it was observed that as per Rule 3(4) of the CENVAT Credit Rules, 2004, CENVAT Credit could be utilized in certain situations. The Tribunal noted that payments made from the CENVAT Credit Account were considered as due payments for the purpose of deposit under Section 35F. Therefore, the Tribunal concluded that the First Appellate Authority's view was incorrect, and the appeals were allowed by way of remand for the First Appellate Authority to decide the appeals on their merits, granting the appellants a reasonable opportunity of hearing. Both parties were allowed to present evidence, and all issues were kept open. The appeals were allowed by way of remand, emphasizing that the deposit could be made from the CENVAT Credit Account if permissible under the rules.
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