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2015 (4) TMI 997 - HC - Central ExciseWaiver of pre deposit - Jurisdiction of Tribunal - Whether the Hon ble Tribunal has jurisdiction to put a condition of depositing ₹ 40 lakhs while remanding the issue back to the Commissioner of Central Excise for fresh adjudication - Held that - Tribunal has dealt with the merits of the case at length, and held that there was no discussion or evidence available on record to show excess consumption of raw material and electricity, or any other material to show that the appellant removed the products clandestinely. It has also been recorded in the impugned order that in the audit which was conducted, no discrepancy was found in the records of the company. The Tribunal has also held that there was no indication to show that there was excess consumption of raw material, or there was misdeclaration of consumption by the appellant. After giving a detailed finding of fact that the Adjudicating Authority had not considered the various evidences which were led, and that no proper opportunity of cross-examination or hearing was afforded to the appellant, the Tribunal has set-aside the order passed by the Adjudicating Authority which had imposed liability of over ₹ 26.00 crores on the appellant. It is clear that though for setting-aside the order passed by the Adjudicating Authority and remanding the case for fresh decision, sufficient reasons have been given, but no reason, whatsoever, has been given for imposing a precondition of deposit of ₹ 40.00 lakhs by the appellant. There is even no justification for quantifying the amount ₹ 40 lakhs to be deposited by the appellant. - Tribunal may, for some specific and valid reason, have the jurisdiction to impose the condition of deposit of certain amount while remanding the case back to the Adjudicating Authority, but the same can be done only in a judicious manner and not in arbitrary manner and without justification. In the present case, the same is totally lacking. - Decided in favour of assessee.
Issues:
1. Imposition of the condition of deposit of Rs. 40.00 lakhs by the Tribunal before remanding the matter back to the Adjudicating Authority. Analysis: The appellant, a manufacturer of Panmasala and Gutka, filed an appeal against the order passed by the Customs, Excise, and Sales Tax Appellate Tribunal, which remanded the matter to the Adjudicating Authority with a condition to deposit Rs. 40.00 lakhs. The primary issue raised was the jurisdiction of the Tribunal to impose such a condition. The appellant argued that Section 35C of the Central Excise Act, 1944, under which the order was passed, does not empower the Tribunal to impose a deposit condition. The appellant contended that since the original order was set aside, there was no liability for Excise Duty, making the deposit condition unwarranted. The respondent, however, argued that the Tribunal had the power to pass orders with directions as it deems fit, including imposing such conditions. The Tribunal's power to impose conditions while remanding a case was extensively discussed. The appellant cited various judgments, including the case of NATIONAL OXYGEN LIMITED vs COMMISSIONER OF CUSTOMS, CHENNAI, where it was held that no precondition for deposit could be imposed during remand. The appellant also referred to the case of MAA MAHAMAYA INDUSTRIES LTD vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX VISAKHAPATNAM-I, where it was stated that the Tribunal lacks the inherent power to demand security before adjudication post-remand. On the contrary, judgments from the Punjab & Haryana High Court and the Gujarat High Court suggested that the Tribunal could direct a deposit amount while remanding a case, provided valid reasons were given. The High Court analyzed the Tribunal's order and found that while valid reasons were provided for setting aside the original decision and remanding the case, no justification was given for imposing the deposit condition of Rs. 40.00 lakhs. The Court emphasized that the Tribunal's power to impose such conditions should be exercised judiciously and with valid reasons. In this case, the lack of justification for the deposit amount led the Court to set aside the condition. The Court held that while the Tribunal may have the authority to impose a deposit condition under specific circumstances, it must be done judiciously, which was lacking in this instance. Consequently, the Court allowed the appeal and directed the Adjudicating Authority to reconsider the matter without requiring the appellant to deposit the sum of Rs. 40.00 lakhs. In conclusion, the High Court ruled that the Tribunal's imposition of the deposit condition lacked justification and was set aside, emphasizing the need for judicious exercise of such powers. The judgment clarified that while the Tribunal may have the jurisdiction to impose deposit conditions under specific circumstances, it must be done with valid reasons, which were absent in this case.
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