By TIOL News Service

MUMBAI, FEB 18, 2013: THE Commissioner(A) does the unthinkable. In the remand proceedings ordered by the CESTAT, the Commissioner(A) raised the demand by more than ten times and imposed equivalent penalty and interest.

Let aside the issue involved in the proceedings for a moment and imagine as to what would have been the fate of the assessee had the field officers whipped him with the New Year Circular 967.

Fortunately, nothing of this happened probably because the duty amount confirmed was Rs.1,78,051.18 [paise included - s. 37D of the CEA, 1944 notwithstanding].

By the way, the assessee had to knock the doors of the CESTAT in the second round of proceedings and submit thus -

+ in the earlier round of litigation a demand of duty of Rs.17,107/- was confirmed which was duly paid by the applicant. On payment of the said amount, their appeal was remanded for fresh consideration.

+ as the quantum of demand is disputed, the amount paid as per the earlier order may be considered sufficient in compliance with provisions of section 35F of CEA, 1944 and waiver of pre-deposit of balance amount of duty, interest and penalty be granted.

The Revenue representative had a justification ready for this "enhancement". He submitted that in the remand proceeding the Commissioner (Appeals) had gone into details and thereafter enhanced the amount of duty from Rs.17,107/- to Rs.1,78,051.18. And, therefore, the applicant should be asked to pre-deposit the remaining duty as confirmed in the impugned order.

The Bench observed -

"6. In the earlier round of litigation the demand against the applicant was Rs.17,107/- and the same has been paid by the applicant. In the remand proceeding the demand has been enhanced to Rs.1,78,051.18. Without going into the merits of the case, the quantum of demand cannot be justified. In these circumstances, prima facie, the applicant has made out a case for 100% waiver of pre-deposit. Accordingly, I grant waiver of pre-deposit of duty, apart from Rs.17,107/- which was already paid, along with interest and penalty and stay recovery thereof during the pendency of the appeal."

In passing: Probably, it is better to enhance our knowledge by going through the Supreme Court decision in BANSHI DHAR LACHHMAN PRASAD AND ANOTHER - (2002-TIOL-336-SC-CX) where it is held that an order of remand for a de novo adjudication cannot deprive an appellant of the favorable directions obtained by him from the adjudication officer and would not have the effect of subjecting him to a greater penalty than has been adjudged against him in the original decision or order.

(See 2013-TIOL-311-CESTAT-MUM)