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2020 (8) TMI 294 - HC - Central ExciseWaiver of pre-deposit - undue hardship to make the deposit - Section 35F of the Central Excise Act, 1944 - HELD THAT - As per Section 35F of CEA, there was no compulsion for payment of the pre-deposit at the relevant point of time. The provision prescribed that, if the appellant was to make out a case of undue hardship, pre-deposit could be waived keeping in mind the interest of the Revenue. Undisputedly, the assessee has stopped production from the year 2013. Ever since then, there is neither production, nor generation of any income. In the absence of any income being generated, we are of the view that it would cause undue hardship if the appellant is directed to make the pre-deposit. Therefore, the same constitutes a hardship to the appellant. Payment of 7 % of the duty demanded - HELD THAT - This would roughly work out to be about ₹ 28,00,000/-. However, on considering the fact that the assessee has stopped production since the year 2013 and keeping in mind the long passage of time, it is deemed just and appropriate to direct the appellant to deposit a sum of ₹ 20,00,000/- with the Commissioner, G.S.T, Dehradun within a period of three months from today - The CESTAT to thereafter consider the matter on merits. Appeal disposed off.
Issues:
1. Appeal against the order rejecting plea for waiver of pre-deposit by CESTAT. 2. Consideration of undue hardship for waiver of pre-deposit under Section 35F of the Central Excise Act, 1944. 3. Dispute on the percentage of pre-deposit required post-amendment by Act 25 of 2014. 4. Decision on the amount to be deposited by the appellant considering the circumstances. Analysis: 1. The appellant filed an appeal against the order of CESTAT rejecting the plea for waiver of pre-deposit. The appellant argued that CESTAT failed to consider the plea and did not undertake the exercise as required by Section 35F of the Central Excise Act, 1944. 2. The appellant contended that they had stopped production since 2013 and had no finances to pay the pre-deposit amount. The appellant claimed undue hardship and requested the waiver of pre-deposit, emphasizing that they were not liable to pay the duty demanded by the respondent. The appellant undertook to pay the entire amount if the Tribunal's decision went against them. 3. The respondent argued that post-amendment by Act 25 of 2014, the pre-deposit was 7½% of the duty demanded. The respondent disputed the appellant's claim of undue hardship and suggested that even if undue hardship was accepted, a minimum of 7½% of the duty demanded should be paid to protect the Revenue's interest. 4. The Court considered the circumstances, noting that the appellant had stopped production since 2013, causing undue hardship. Despite the appellant's counsel arguing for a 7½% payment, the Court directed the appellant to deposit &8377;20,00,000 within three months, considering the long period without production. The appellant's undertaking to pay the duty demanded and the pre-deposit if the Tribunal's decision went against them was recorded. This judgment highlights the importance of considering undue hardship for waiver of pre-deposit, post-amendment requirements, and the Court's discretion in determining the deposit amount based on the circumstances presented by the appellant.
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