2015 (1) TMI 370 - AT - Central Excise

Waiver of pre deposit - Failure to comply with pre deposit condition - Violation of Section 35F - Held that - Despite the leave granted by the High Court, the appellant has neither applied for extension period for deposit nor he has complied with the order. Only plea raised before us is that the appellant is not in a position to deposit the amount of ₹ 25 lakhs because of financial constraint. Section 35F of the Central Excise Act, 1944 provides that no appeal against the decision or order relating to the duty demand shall be heard unless the person desirous of filing appeal pending such appeal, deposit the duty demand or penalty levied. Only exception to this rule is that the Tribunal may dispense with such deposit subject to such condition as he or it may deem fit. In the instant case, the Tribunal after hearing parties directed the appellant to deposit ₹ 25 lakhs within the directed period as a condition for waiver of pre-deposit of remaining amount of duty, interest and penalty. Since the appellant has failed to comply with the order of deposit passed by the Tribunal, his appeal cannot be heard. Therefore, the appeal is dismissed for violation of Section 35F of the Central Excise Act, 1944. - Decided against Assessee.

Summary

Issues: Compliance with deposit order under Section 35F of the Central Excise Act, 1944.

Comprehensive Analysis:

The case involved the appellant who was directed by the Tribunal to deposit a sum of Rs. 25 lakhs within a specified period as a condition for waiver of pre-deposit of the remaining duty, interest, and penalty amounts. Instead of complying with the Tribunal's directions, the appellant chose to challenge the order by filing a writ petition in the High Court. The High Court dismissed the writ petition citing financial constraints but granted leave for an extension of time before the Tribunal.

Despite the leave granted by the High Court, the appellant neither applied for an extension period for deposit nor complied with the order. The only plea raised was the financial constraint preventing the deposit of Rs. 25 lakhs. Section 35F of the Central Excise Act, 1944 mandates that no appeal against a duty demand decision shall be heard unless the appellant deposits the duty demand or penalty levied, with the Tribunal having the discretion to dispense with such deposit subject to conditions.

In this case, since the appellant failed to comply with the deposit order issued by the Tribunal, the appeal could not be heard. The Tribunal emphasized that the appellant's non-compliance violated Section 35F of the Central Excise Act, 1944, leading to the dismissal of the appeal. The judgment reinforced the importance of adhering to statutory provisions and orders issued by the Tribunal in matters concerning deposit requirements for appeals related to duty demands or penalties under the Central Excise Act, 1944.