2013 (4) TMI 2 - AT - Central Excise

Non-compliance with Section 35F of the Central Excise Act - Denying the benefit of Notification No. 3/2004-C.E. and had also imposed equal amount of penalty - Held that - There is no prima facie evidence even of a water supply plant, as defined under the Notification, having been set up by the appellant. In this view of the matter, the denial of exemption prima facie cannot be faulted. Therefore, the appellant ought to have honoured the appellate Commissioner s direction for pre-deposit. We direct the appellant to pre-deposit the duty amount within six weeks and report compliance to the Commissioner (Appeals), whereupon the learned Commissioner (Appeals) shall take up the appeal for disposal as above - The stay application also stands disposed of.

Summary

Issues:
1. Denial of exemption under Notification No. 3/2004-C.E.
2. Dismissal of appeal by the appellate Commissioner on the ground of non-compliance with Section 35F of the Central Excise Act.

Issue 1: Denial of exemption under Notification No. 3/2004-C.E.:
The appeal was against the original authority's decision to demand duty and penalty from the assessee for three items - stop-log gates, screens, and sluice gates, denying them the benefit of Notification No. 3/2004-C.E. The notification provided exemption for items required for setting up a water supply plant, subject to producing a certificate confirming the goods were cleared for the intended use. The appellant presented a certificate from the District Collector, but it did not certify the items were cleared for a water supply plant as defined in the Notification. The Tribunal found no prima facie evidence of a water supply plant being set up by the appellant, supporting the denial of exemption. Consequently, the Tribunal held that the appellant should have complied with the appellate Commissioner's direction for pre-deposit.

Issue 2: Dismissal of appeal by the appellate Commissioner:
The appellate Commissioner dismissed the appellant's appeal for non-compliance with Section 35F of the Central Excise Act, as the appellant failed to pre-deposit the entire duty amount as directed. However, the Tribunal observed that the appellate order did not address the merits of the case. Therefore, the Tribunal set aside the appellate Commissioner's order and remanded the case back to the Commissioner (Appeals) to pass a detailed order on the substantive issue on merits in line with legal principles and natural justice. The Tribunal directed the appellant to pre-deposit the full duty amount within six weeks for the appeal to proceed. The stay application was also disposed of, emphasizing that the Commissioner (Appeals) should not be influenced by any observations made in the Tribunal's order regarding the assessee's exemption claim.

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