Whether CESTAT can remand the matter back with the direction to the appellant to first pre deposit a part of the duty even though the Act does not provide?

PJ/Case Laws/2012-13/1287

Case:-Fidelity Magnetics versus Commissioner of Central Excise

Citation:-2012 (27) S.T.R. 4 (Bom.)

Brief Facts:-The Appellant is engaged in the manufacture of recorded audio cassettes on job work basis for various music companies. The assessee was called upon to show cause as to why the clearances effected during the period from 1-3-1997 to 1-6-1998 should not be held to be under valued and duty should not be recovered with interest and penalty. The assessee opposed the claim in the show cause notice. In the order in original, the duty demand was confirmed with interest and penalty. On appeal filed by the assessee, the Commissioner of Central Excise (Appeals), by his order, directed the assessee to make pre-deposit of the entire amount of duty by relying upon the Circular No. 619/2002 dated 19-2-2002. As the amount was not deposited as per the order, the Commissioner of Central Excise (Appeals) by his order missed the appeal for non compliance of the pre-deposit order. The assessee filed further appeal before the CESTAT with an application seeking waiver of pre-deposit and the tribunal by following its decision in the case of Vijayata Audio World and Ors. waived the pre-deposit. Subsequently, the impugned order of Commissioner (Appeals) is set aside by the tribunal and the matter has been restored to file the same to the Commissioner (Appeals) with a direction to pass fresh order on merits as the issue was highly debatable and highly arguable. However, the Tribunal further directed that the order of the Tribunal in restoring the appeal before the Commissioner (Appeals) shall be subject to the condition that the assessee shall deposit 50% of the amount involved within the time stipulated therein. Challenging the aforesaid order the present appeal is filed.

Appellant’s Contention:-The appellant said that once the application for waiver of pre-deposit is allowed by the Tribunal and the matter was heard on merits, the Tribunal while setting aside the order of Commissioner (Appeals) and restoring the matter to file the same to Commissioner (Appeals) could not have directed the assessee to make pre-deposit.

Reasoning of Judgement:- We have considered the submissions of both sides. In the present case the Commissioner of Central Excise (Appeals) had directed the assessee to make pre-deposit by relying upon the Circular No. 619/2002. Similarly the Tribunal by following its decision in the case of Vijayata Audio World and Ors. (supra) had granted full waiver of pre-deposit. While disposing of the appeal, the Tribunal has neither considered the applicability of the Circular No. 619/2002 nor the non-applicability of the order of the Tribunal in the case of Vijayata Audio World (supr4). In any event, having granted full waiver of pre-deposit, the Tribunal in the absence of any special circumstances ought not to have ordered pre-deposit. In these circumstances, since the issue in the present case relates to the period 1-3-1997 to 1-6-1998, it would be just and proper to set aside the order passed by the Commissioner (Appeals) and also the order of CESTAT and direct the Commissioner of CESTAT (Appeals) to dispose of the appeal on merits without insisting pre- deposit. Accordingly, without going into the question as to whether the Tribunal has power to direct pre-deposit under Section 35C(1) of the Central Excise Act 1944, we dispose of the appeal in terms stated herein above. The appeal is disposed of accordingly with no order as to costs.

Decision:-Appeal Allowed.

Comment:This is a weird case wherein the Tribunal firstly granted full waiver of pre-deposit and subsequently, directed the appellant to file the appeal to the Commissioner (Appeals) with the condition to deposit 50% of the amount involved on account of issue under consideration being highly debatable.

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PJ/Case Laws/2012-13/1287

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