2019 (2) TMI 472 - AT - Central Excise

Maintainability of appeal - non-deposit of 7.5% of duty and penalty - Held that - In the main appeal, the Commissioner (A) has not given any finding on the merit and has rejected the appeal of the appellant only on non-depositing 7.5% of the duty and penalty - It is found that the appellant have deposited 10% of the duty before this Tribunal and thereby complied with the requirement of Section 35F. The impugned order is not sustainable and the same is set aside by remanding all the cases to the Commissioner (A) with a direction to decide the same on merits by following the principles of natural justice - appeal allowed by way of remand.

Issues:
1. Rejection of main appeal due to non-deposit of duty and penalty.
2. Imposition of penalties under Rule 26 of Central Excise Rules, 2002 on co-noticees.
3. Allegations of clandestine removal of CTD bars by the appellant.
4. Compliance with mandatory pre-deposit requirement under Rule 35F of the Central Excise Act, 1944.
5. Lack of merit-based decision by the Commissioner (A) in rejecting the appeal.

Issue 1: Rejection of main appeal due to non-deposit of duty and penalty
The appellant, engaged in manufacturing CTD/TMT bars, was alleged to have cleared goods without payment of Central Excise duty. The lower authority confirmed the clandestine removal of goods, imposed penalties, and confiscated the same. The appellant's appeal was rejected by the Commissioner (A) solely based on non-deposit of 7.5% of duty and penalty. The appellant argued that they had made the mandatory pre-deposit of 10% before filing the appeal, complying with Rule 35F. The Tribunal found that the Commissioner (A) did not consider the merits of the case and set aside the order, remanding the case for a merit-based decision after affording an opportunity of hearing.

Issue 2: Imposition of penalties under Rule 26 of Central Excise Rules, 2002 on co-noticees
The Commissioner (A) imposed penalties on co-noticees under Rule 26 of Central Excise Rules, 2002. However, the Tribunal's decision primarily focused on the main appellant's case and the non-deposit issue. No specific details were provided regarding the imposition of penalties on co-noticees, indicating that this issue was not the primary concern of the Tribunal's judgment.

Issue 3: Allegations of clandestine removal of CTD bars by the appellant
The appellant was accused of clandestine removal of CTD bars, leading to the imposition of penalties and confiscation of goods. The Tribunal's decision did not delve deeply into the specifics of these allegations but rather focused on the procedural aspect of the non-deposit issue and the lack of a merit-based decision by the Commissioner (A).

Issue 4: Compliance with mandatory pre-deposit requirement under Rule 35F of the Central Excise Act, 1944
The appellant argued that they had complied with the mandatory pre-deposit requirement of 10% before filing the appeal, as mandated by Rule 35F of the Central Excise Act, 1944. The Tribunal acknowledged this compliance and set aside the Commissioner (A)'s order, emphasizing the importance of following procedural requirements while deciding appeals.

Issue 5: Lack of merit-based decision by the Commissioner (A) in rejecting the appeal
The Tribunal criticized the Commissioner (A) for not providing a merit-based decision in rejecting the appeal solely based on the non-deposit issue. The Tribunal emphasized the necessity of considering the merits of the case, following principles of natural justice, and affording the appellant an opportunity of hearing. The decision highlighted the importance of a thorough and fair evaluation of appeals beyond procedural aspects.

This comprehensive analysis of the judgment covers all the issues involved, providing a detailed breakdown of the Tribunal's decision and the arguments presented by the parties involved.

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