2015 (2) TMI 90 - HC - Central Excise

Waiver of pre deposit - Penalty u/s 11AC - Held that - It is evident from the materials available on record that this is a case where the demand is more than ₹ 6 Crores, and it is evident from the record that the appellant, has been sincere and diligent in pursuing the appeal. The said fact is fortified by the action of the appellant in filing an application for early hearing of the appeal and this action of the appellant only shows his bona fides in prosecuting the appeal as well as the miscellaneous application. The Tribunal has merely ordered pre-deposit of the entire amount of ₹ 6 Crores without taking into account any one of the plea as made by the appellant in the application for waiver of pre-deposit. As pleaded by the learned counsel for the appellant, the Tribunal has neither gone into the merits of the case nor considered the undue hardship of the appellant. That apart, the main plea of the appellant that the activity carried out by them could not be said to be manufacture within the meaning of Section 2 (f) (iii) of the Act has not at all be considered by the Tribunal. To that extent, this Court is of the considered opinion that the appellant s plea of prejudice deserves to be accepted. - order under challenge is set aside and this appeal is disposed of and the Tribunal is requested to re-hear the miscellaneous application for stay and waiver of pre-deposit during the 2nd week of February, 2015. - Appeal disposed of.

Issues:
1. Tribunal's order for pre-deposit of entire amount demanded.
2. Tribunal's waiver of penalty and interest based on appellant's non-appearance.
3. Tribunal's failure to consider appellant's plea for waiver of pre-deposit.
4. Tribunal's lack of consideration on the main plea regarding the nature of the activity carried out by the appellant.

Analysis:
1. The appellant challenged a Tribunal's order requiring pre-deposit of the entire amount demanded but waiving penalty and interest due to non-appearance. The appellant, engaged in spare parts business, faced demands under the Central Excise Act for alleged manufacturing activities. The Tribunal remanded the matter back to the Commissioner for fresh decision on merits, leading to a subsequent order confirming the demands. Despite the appellant's diligence in pursuing the appeal, the Tribunal ordered pre-deposit without considering the appellant's plea for waiver.

2. The appellant's grievance stemmed from the Tribunal's decision based on their non-appearance at a hearing, which resulted in the order for pre-deposit. The appellant claimed lack of intimation for the hearing date as the reason for non-appearance. The respondent's counsel agreed that the Tribunal's decision was influenced by the appellant's absence, acknowledging the absence of evidence regarding intimation to the appellant. The Court considered the appellant's explanation and decided to grant an opportunity for the appellant to present their case before the Tribunal.

3. The Court found that the Tribunal's order lacked consideration of the appellant's plea for waiver of pre-deposit, despite the appellant's efforts in pursuing the appeal diligently. The Tribunal's failure to assess the appellant's undue hardship and the merits of the case, particularly regarding the nature of the activity in question, led the Court to set aside the order and request a re-hearing of the miscellaneous application for stay and waiver of pre-deposit by the Tribunal in February 2015.

4. The appellant's main plea concerning the classification of their activities as 'manufacture' under the Central Excise Act was not adequately addressed by the Tribunal. The Court emphasized the importance of considering the appellant's arguments and potential prejudice in the decision-making process. Consequently, the Court set aside the order, highlighting the need for a more comprehensive review by the Tribunal on the appellant's contentions regarding the nature of their business activities.

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