No direction to pre-deposit when the issue is decided in favour of assessee for earlier period.

PJ/Case Law/2014-15/2146

Case:- HINDUSTAN COCA COLA BEVERAGES PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE (ST), CHENNAI-I

Citation:- 2014-TIOL-349-CESTAT-MAD

Brief facts:-The appellant has filed an appeal against order of Commissioner (Appeals) rejecting the appeal before him for the reason that the amount ordered to be pre-deposited was not deposited by the appellant. The issue involved in The appeal is cenvat credit on the bottles used for marketing soft drinks which get destroyed in the manufacturing process or during the transportation of the goods.

Appellant’s contention:- The appellant submitted that the issue is already decided in their favour for an earlier period by the Commissioner (Appeals). He also submitted that for the subsequent period also, the Commissioner (Appeals) has passed orders dropping such proposal. The issue is also decided in their favour by the Tribunal also in the case of CCE Allahabad Vs Burnet Pharmaceutical Pvt. Ltd. 2009 (245) ELT 394 (Tri.-Cal). Though this decision was pointed in the stay petition before the Commissioner (Appeal), the Commissioner (Appeals) did not consider this aspect and ordered pre-deposit of the entire amount. He also pointed out that on the date fixed for hearing stay petition, the appellant had asked for adjournment so that he could produce the orders for earlier period but the same was not granted. His prayer was that since the issue has already been decided in their favor by the Tribunal, the order for pre-deposit is unwarranted and the issue should be decided on merits without any pre-deposit.

Respondent’s contention:- Opposing the prayer, Ld. AR for Revenue relied on the decision of Hon. High court of Madras in Aluminium & Glazing Vs CCE = (2013-TIOL-168-HC-MAD-ST)and a few other decisions and argued that once order for pre-deposit is made, it has to be complied with.

Reasoning of judgment:-After hearing both sides, the judge found that Commissioner (Appeals) has asked for pre-deposit on an issue which is already decided in favour of the assessee. In such a situation, Commissioner (Appeals) should have exercised the discretion vested upon him under section 35F of the Central Excise Act more judiciously. In such cases, litigants have no option other than to agitate the matter at higher levels which is being done in the present proceeding. The jury was of the view that this is a case where there was no justification to call for any pre-deposit for hearing the appeal before Commissioner (Appeals). It was ordered accordingly and the matter was remitted to the
Commissioner (Appeals) after setting aside the impugned order for deciding the matter on merits after complying with principles of natural justice but without insisting of pre-deposit under section 35F.

Decision: -Appeal allowed by way of remand.

Comment:- The essence of this case is that when an issue is covered by earlier decision, then the appellate authority is required to exercise sufficient and reasonable discretion while deciding the stay application. It was held that when there are decisions pronounced in favour of the assessee, there was no need to order pre-deposit.

Comments

PJ/Case Law/2014-15/2146

Post a Comment

Query