2014 (5) TMI 90 - HC - Central Excise

Maintainability of appeal - Pre deposit order - Held that - requiring the petitioners to deposit the entire principal sum of duty with interest even at the first appellate stage by way of predeposit would be harsh. We have considered the prima facie nature of the petitioners case, the amount involved and the amount already deposited by the petitioners so far. - Decided conditionally in favour of assessee.

Summary

Issues involved:
Challenge to order of CEGAT requiring predeposit for appeal maintenance, prima facie opinion on limitation of demands, penalty imposition, amount deposited by petitioners, harshness of requiring full predeposit, direction to deposit further sum for appeal maintenance.

Analysis:
The judgment delivered by the Gujarat High Court pertains to a challenge against an order by CEGAT mandating a predeposit for maintaining an appeal. The petitioners contested an order dated 17.4.2013, which required them to deposit the entire principal duty amount along with interest to proceed with the appeal before the tribunal. The tribunal, in its order, expressed a prima facie opinion that the majority of the demands being time-barred was not acceptable. Additionally, the tribunal noted that there was no concealment or misstatement by the petitioners regarding the penalty imposed by the adjudicating authority.

Furthermore, it was observed that the petitioners were facing a duty demand of Rs.4,86,65,605/- with interest, and had already deposited a sum of Rs. 1.86 crores towards their liabilities arising from the proceedings. Considering the circumstances of the case, the High Court opined that requiring the petitioners to deposit the entire principal duty amount with interest at the first appellate stage would be unduly harsh. The court took into account the prima facie nature of the petitioners' case, the total amount involved, and the sum already deposited by the petitioners.

Consequently, the High Court directed the petitioners to deposit a further sum of Rs.50 lakhs by a specified date to complete their liability for predeposit to maintain the appeal before the tribunal. If the additional amount was deposited within the stipulated timeframe, the tribunal was instructed to proceed with hearing the appeal on its merits. Ultimately, the petition was disposed of based on the aforementioned considerations, providing clarity on the required predeposit amount for appeal continuation.