2014 (5) TMI 248 - HC - Central Excise

Waiver of pre-deposit - tribunal granted stay of 2/3rd amount - valuation - job work - Held that - Insofar as point relating to the assessee is concerned, as to whether the assessee is the principal-manufacturer by itself or manufacturer on behalf of someone else. Ongoing into the merits of the matter and on a perusal of the order of the Tribunal does show that the Tribunal had taken this aspect into consideration and also examined the financial position of the assessee and on the other hand, had found there is no financial hardship, which had been pleaded by the assessee. - Order of tribunal sustained - amount to be deposited as per stay order - decided against the assessee.

Summary

Issues:
Appeal under Section 35G of the Central Excise Act, 1944 for waiver of pre-deposit amount. Interpretation of Rule 10A of the [Rules]. Whether the appellant is an independent manufacturer or a job worker. Financial hardship plea by the assessee. Vacating interim stay order under Section 35F of the Act.

Analysis:

Issue 1: Appeal under Section 35G for waiver of pre-deposit amount
The appellant filed an appeal under Section 35G of the Central Excise Act seeking waiver of a pre-deposit amount of Rs. 3,88,31,569/-, which was the subject matter of the appeal. The Tribunal granted partial relief to the appellant, requiring a deposit of Rs. 1.14 crore within six weeks. The appellant challenged this order, leading to the present appeal before the High Court.

Issue 2: Interpretation of Rule 10A of the [Rules]
The appellant contended that Rule 10A of the [Rules] was not applicable as they were an independent manufacturer, not a job worker. The High Court noted that the judgment cited by the appellant was not relevant to Rule 10A introduced in 2007. The Tribunal had considered this aspect, along with the financial position of the assessee, finding no financial hardship as claimed by the appellant.

Issue 3: Independent manufacturer or job worker
The appellant argued that they were an independent manufacturer, not working on behalf of someone else. Citing a Supreme Court judgment, the appellant sought to establish their position. However, the High Court found that the Tribunal had already considered this aspect, and since the main appeal was pending, no further examination was necessary at this stage.

Issue 4: Financial hardship plea
The appellant claimed financial hardship, which the Tribunal did not find substantiated. The High Court, considering the Tribunal's decision and the relief granted, declined to delve deeper into this contention, especially since the main appeal was still pending before the Tribunal.

Issue 5: Vacating interim stay order under Section 35F of the Act
The respondent sought to vacate the interim stay order granted by the High Court under Section 35F of the Act. The respondent argued that the Tribunal had not denied relief entirely and had granted substantial waiver. The High Court, after considering both parties' arguments, dismissed the appeal and extended the time for deposit by four weeks.

In conclusion, the High Court upheld the Tribunal's decision, finding no grounds for interference at this stage, especially since the main appeal was still pending. The appeal was dismissed, and the interim stay order was vacated, with an extension granted for the deposit of the amount.