2019 (1) TMI 1161 - AT - Central Excise

Requirement of Mandatory pre-deposit - appellant have filed the appeal against the dismissal of application for rectification of mistake - Held that - In the impugned orders have been admitted by the Commissioner (A) and that the appellant have made the mandatory pre-deposit on 5.2.2016 vide challan No.0072 and copy of the letter dated 19.5.2016 along with challan showing pre-deposit was enclosed. But in spite of the mandatory pre-deposit made by the appellant, the Commissioner (A) refrained from restoring the appeals and decided the same on merits. As per Section 35F of the Central Excise Act, the appellant is required to make mandatory pre-deposit @ 7.5% of the duty demanded in the order to entertain their appeals by the Commissioner (A) or by the Tribunal - But, in the present case, the appellants have made the mandatory pre-deposit which was not considered by the Commissioner (A) on the ground that the same was brought to his notice while disposing of the appeals. Since the Commissioner (A) has not decided the issue on merits, therefore, all the appeals are remanded to the Commissioner (A) with a direction to decide the same on merits after complying with the principles of natural justice - appeal allowed by way of remand.

Summary

Issues: Mandatory pre-deposit requirement for appeals, dismissal of application for rectification of mistake, power of appellate authority to restore appeals.

Analysis:
1. Mandatory Pre-deposit Requirement: The Registry raised a defect regarding the mandatory pre-deposit of 10% for the appeals. The appellants argued that since the appeal was against the dismissal of an application for rectification of mistake and not against any demand, the pre-deposit was not applicable. The Judicial Member examined the impugned orders and concluded that since the issue related to the rectification of mistake, the mandatory pre-deposit was not required, thereby setting aside the objection raised by the Registry.

2. Dismissal of Application for Rectification of Mistake: The appellants, a society registered under Central Excise, had availed CENVAT credit based on a document from an Input Service Distributor. The Asst. Commissioner held them ineligible for the credit, leading to an appeal before the Commissioner (A). Despite making a pre-deposit under Section 35F of the Central Excise Act, the appeal was dismissed for non-compliance. The Judicial Member found that the Commissioner (A) failed to consider the pre-deposit made by the appellants, which was a requirement for entertaining appeals. The impugned orders were set aside, and the appeals were remanded for a decision on merits.

3. Power of Appellate Authority to Restore Appeals: The appellants had filed appeals against rejection orders by the Commissioner (A) for restoration of appeals. The Commissioner (A) had rejected the applications citing a lack of power to restore appeals. The Judicial Member consolidated the appeals due to identical issues and remanded them to the Commissioner (A) for a decision on merits, emphasizing compliance with natural justice principles and providing a hearing opportunity to the appellants.

In conclusion, the judgment addressed the issues of mandatory pre-deposit requirements, dismissal of rectification of mistake applications, and the power of the appellate authority to restore appeals. The decision emphasized the need for compliance with procedural requirements and principles of natural justice in adjudicating appeals related to Central Excise matters.