2016 (8) TMI 883 - AT - Central Excise

Maintainability - Demand of interest and imposition of penalty under Section 11AC - Whether Section 35F require payment of any pre-deposit in case of interest or not - Held that - Section 35F specifically lays down that pre-deposit under Section 35F is required when penalty has been disputed. In the instant case, there is a specific dispute of penalty, therefore, provisions of Section 35F have to be invoked. - Decided against the appellant

Summary

Issues:
1. Maintainability of the appeal due to demand of interest and penalty.
2. Interpretation of Section 35F regarding pre-deposit requirements for interest and penalty disputed cases.

Analysis:
1. The appeal was posted for maintainability concerning the demand of interest and penalty imposed on the appellant. A substantial amount of interest and an equal penalty under Section 11AC were confirmed for recovery. The appellants contended that Section 35F does not mandate a pre-deposit in cases involving interest alone.

2. The argument put forth by the appellants was countered by the learned AR, stating that a pre-deposit is necessary in the current scenario as both interest and penalty were in question. Section 35F of the Central Excise Act was referred to during the proceedings to shed light on the pre-deposit requirements pending an appeal. This section specifies the conditions under which a deposit of duty demanded or penalty levied is necessary during the appeal process.

3. Section 35F was meticulously examined, emphasizing that in cases where penalty is disputed, as in the present situation where both interest and penalty were challenged, the provisions of Section 35F necessitate compliance with the pre-deposit requirement. The judgment highlighted the importance of adhering to the statutory provisions when disputing penalties to ensure the maintainability of the appeal.

4. Consequently, the appellants were granted a period of four weeks to adhere to the provisions outlined in Section 35F of the Central Excise Act. Failure to comply within the stipulated timeframe would result in the dismissal of the appeal on grounds of non-maintainability. The deadline for compliance was set for 8th July 2016, emphasizing the significance of meeting the statutory requirements to sustain the appeal.