Central Excise - Appeal - Waiver of pre-deposit - When Stay granted by High Court is vacated, Tribunal's order comes back to life - assessee directed to make pre-deposit: High Court
By TIOL News Service
CHENNAI, JULY 19, 2013: INTERESTING FACTS: The assessee is a manufacturer of steam boilers, thermic fluid heaters and hot water boilers falling under chapter heading 8402.10 of the Central Excise Tariff, 1985, as it stood prior to 28.2.2005. The assessee claimed exemption from duty on the ground that they were agro waste conversion device producing heat energy.
Additional Commissioner of Central Excise passed an order on 29.11.2005 dropping the proceedings initiated under two show cause notices.
As against this order, the Revenue filed an appeal before the Commissioner of Central Excise (Appeals), whereby exemption granted was negatived and the adjudicating authority was directed to redo the assessment.
As against this order, the assessee went on further appeal before the CESTAT along with the application seeking waiver of pre-deposit.
Tribunal passed an order on 14.5.2008 directing the appellant to make a pre-deposit of Rs.5.00 lakhs within a period of four weeks and report compliance on 24.6.2008.
The petition for modification filed by the assessee was again dismissed under order dated 02.07.2008 granting further two weeks time and report compliance on 22.7.2008.
As against this order passed directing deposit of Rs.5.00 lakhs, the assessee filed writ petition in the Madras High Court.
Although, on admission this Court granted interim stay of the order, it is seen from the order passed by this Court on 29.10.2008 that the interim order originally granted by this Court in the writ proceedings was vacated having regard to the contention of the assessee that the amount had not been quantified and that there was no need to make payment. Hence, there was no necessity to pass any interim order. Based on this, we find from the endorsement made by the Tribunal on 23.1.2009 that in view of the High Court order dated 29.10.2008, no pre-deposit was required and the appeal was directed to be listed in its turn.
On 10.1.2011, when the Writ Petition was listed, the assessee sought for withdrawal of the Writ Petition, since the relief sought for in the Writ Petition had become infructuous. Thus, the Writ Petition was dismissed as withdrawn.
It is a matter of record that the appeal was not taken up within six months from the date of the order originally passed. Thus, as per proviso to Section 35C ( 2A ) of the Central Excise Act, 1944, as the stay granted had no force in view of the appeal not being disposed of within the stipulated period of 180 days, the assessee filed Miscellaneous Application for extension of stay in the matter of waiver of pre-deposit of duty.
The Tribunal passed an order 1.1.2013 rejecting the assessee's prayer and called upon the assessee to deposit the amount within a period of seven days from the date of the order and report compliance on 10.1.2013.
The assessee is again before the High Court.
The High Court observed,
When the assessee challenged the order passed by the Tribunal originally directing deposit of the amount of Rs.5.00 lakhs, evidently, in the Writ Petition, it was subsequently vacated on the submissions made by the assessee that there was no need to make any payment, as the amount was not quantified. Thus, this Court held that there was no necessity to pass any interim order. Based on this order, the Tribunal stated that no pre-deposit was required. It is not clear under what circumstances the Tribunal by its order dated 23.1.2009 modified the order passed already on pre-deposit. Further, in the context of the fact that when the interim stay granted by this Court was vacated, the order of the Tribunal originally passed directing the assessee to make pre-deposit of Rs.5.00 lakhs stood thereon for compliance. Leaving that aside, yet another fact is the withdrawal of the Writ Petition on 10.1.2011. It is rather perplexing to note the course of conduct adopted by the assessee . Whatever be the reasons, which compelled the assessee to withdraw the Writ Petition, conscious of the provisions under Section 35C ( 2A ) of the Central Excise Act, the assessee once again moved the Tribunal for an order of extension of stay on the pre-deposit of the duty imposed for, by that time, the order on adjudication had come into force. Thus, the Tribunal had correctly analysed the facts and the conduct of the assessee and in exercise of its discretion, directed the assessee to make pre-deposit of Rs.5.00 lakhs within a period of 7 days.
The High Court found no error in the reasoning of the Tribunal and did not find any question of law arising in this appeal to interfere with the order of the Tribunal. However it granted the assessee time of four weeks to make the pre-deposit.
The assessee is an SSI unit and this litigation started sometime in 2004 - still going strong!
(See 2013-TIOL-564-HC-MAD-CX)
