2011 (5) TMI 758 - AT - Central Excise

Pre-deposit - appellant submits that the impugned order is without any merit and appeal has been dismissed for non-compliance with the order of pre-deposit - appellant directed to pre-deposit the said amount appeal is allowed by way of remand

Issues: Compliance with Section 35F of the Central Excise Act, 1944; Merits of the case; Pre-deposit of penalty.

In this case, the appellant's appeal was dismissed for non-compliance with the requirement of pre-deposit under Section 35F of the Central Excise Act, 1944. The matter had been remanded back to the Commissioner (Appeals) in an earlier round of litigation for consideration of submissions. The Commissioner (Appeals) had passed a stay order after considering the submissions. However, in the second round, the appellant failed to comply with the requirement to deposit 50% of the penalty, resulting in the dismissal of the appeal. The appellant, aggrieved by this decision, approached the tribunal. The learned Advocate for the appellant offered to make a pre-deposit of Rs.1,25,000 in compliance with Section 35F and requested the matter to be sent back to the Commissioner (Appeals) for consideration of the case on its merits. The tribunal, after considering the submissions, noted that a total penalty of Rs.5 lakhs had been imposed on the appellant, and directed the appellant to pre-deposit Rs.1,25,000 within four weeks. Upon compliance, the balance amount of penalty would be waived during the appeal's pendency, and the Commissioner (Appeals) would hear the case on merit without requiring further pre-deposit, providing a reasonable opportunity for the appellant to present their case. The appeal was allowed by way of remand for further proceedings.

This judgment primarily deals with the issue of compliance with Section 35F of the Central Excise Act, 1944, regarding pre-deposit of penalty. The tribunal emphasized the importance of adhering to the statutory requirement of pre-deposit before the appeal can be considered on its merits. The appellant's failure to comply with the pre-deposit order led to the dismissal of the appeal, highlighting the significance of procedural requirements in legal proceedings. The tribunal, while allowing the appeal by way of remand, provided a specific direction for the appellant to make the necessary pre-deposit within a specified timeframe to proceed with the case on its merits.

Furthermore, the judgment delves into the aspect of considering the merits of the case. Despite the dismissal of the appeal due to non-compliance with the pre-deposit order, the tribunal acknowledged the appellant's submission regarding the merit of the case. The learned Advocate for the appellant argued that the impugned order lacked merit and requested the tribunal to send the matter back to the Commissioner (Appeals) for a thorough consideration of the case on its merits. The tribunal, after evaluating the submissions, directed the Commissioner (Appeals) to hear the case on merit once the pre-deposit was made, emphasizing the importance of a fair opportunity for the appellant to present their case and for the authorities to consider the merits judiciously.

Overall, the judgment underscores the significance of procedural compliance, particularly in terms of pre-deposit requirements, while also recognizing the importance of considering the merits of a case in legal proceedings. By allowing the appeal by way of remand and providing clear directions for compliance with pre-deposit obligations and subsequent consideration of the case on its merits, the tribunal ensures a fair and balanced approach to the resolution of the matter at hand.

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