1999 (4) TMI 88 - HC - Central Excise

Summary

Issues:
Challenge to order of Customs, Excise & Gold (Control) Appellate Tribunal regarding deposit of adjudicated dues under Central Excise Act, 1944.

Analysis:

1. Challenge to Tribunal's Order:
The petitioner challenged an order by the Customs, Excise & Gold (Control) Appellate Tribunal directing the deposit of Rs. 3.5 lacs out of adjudicated dues of Rs. 7,23,116/- under the Central Excise Act, 1944. The Tribunal waived the demand for the balance amount. The petitioner appealed against an order by the Commissioner, Central Excise, Allahabad, related to the disputed demand.

2. Interpretation of Rule 96ZP:
The petitioner operated a steel rolling mill under a scheme in Rule 96ZP framed under Section 3A of the Act. The rule allows duty abatement for factories not producing notified goods for a continuous period. The Commissioner's order denying abatement lacked reasoning, despite Rule 96ZP's applicability to hot re-rolled products.

3. Pre-deposit Requirement and Financial Hardship:
The Tribunal required pre-deposit of adjudicated dues for entertaining the appeal, but the proviso to Section 35F permits waiver if undue hardship is shown. The Tribunal observed the matter's contentious nature and lack of a strong prima facie case for waiver. The petitioner argued strong merits due to factory closure for over seven days, causing financial inability to pay the directed amount.

4. Judicial Decision:
The Court found the demand pertained to goods not produced, with undisputed factory closure. Acknowledging the contentious nature of the case, the Court noted the lack of specific financial hardship claims by the petitioner. Despite this, considering the factory's halted production, the Court deemed the pre-deposit amount of Rs. 3.5 lacs as causing undue hardship. Thus, the Court directed a nominal deposit of Rs. 50,000, waiving the balance pre-deposit requirement.

This judgment highlights the legal intricacies surrounding the deposit of adjudicated dues under the Central Excise Act, emphasizing the balance between financial hardship and procedural requirements in appellate proceedings before the Tribunal.