By TIOL News Service

CHENNAI, MAY 29, 2014: THIS is an appeal against the order passed by the Commissioner (A) dismissing the appeal filed by the assessee for non-compliance with the Stay order passed in terms of s.35F of the CEA, 1944.

The Revenue representative raised a preliminary objection regarding maintainability of the appeal by citing the following decisions of the Tribunal -

+ Aakash Cable TV Network Vs CC & Excise, Jaipur-II 2013-TIOL-1807-CESTAT-DEL

+ Venus Rubbers Vs CCE, Coimbatore Final Order No.40596/2013 dt. 22.11.2013

+ Hindustan Lever Ltd. Vs CCE (A) Chennai - 2006-TIOL-160-HC-MAD-CX.

+ Vijay Prakash D. Mehta Vs Collector of Customs - 2002-TIOL-427-SC-CUS

It is finally submitted that right to appeal is subject to compliance of pre-deposit of dues under Section 35F of the Act.

The Bench distinguished the decisions cited by the Revenue & observed that the issue is no more res integra in view of the decision of the Tribunal in the case of Girnar Transformers Pvt. Ltd. Vs CCE Kanpur - 2014-TIOL-305-CESTAT-DEL wherein the Tribunal has come to the conclusion that appeal dismissed by the Commissioner (Appeals) for non-compliance of stay order and the assessee's filed appeal under Section 35B is maintainable before the Tribunal.

Inasmuch as the preliminary objection raised by AR was overruled.

Coming to the appeal, the facts are -

+ The appellant was a 100% EOU and on 15.9.2011 by debonding & by paying the appropriate duty had converted the unit into DTA. The appellant had taken the amount of Rs.4,64,204/- as opening balance in the CENVAT account in the DTA unit which was lying unused in 100% EOU.

+ The adjudicating authority observed that there is no provision for transfer of credit from EOU to DTA.

+ The Commissioner (Appeals) directed the appellant to make a pre-deposit of 50% of the duty by way of cash against stay application.

+ And since this direction was not complied with the proceedings before the Tribunal as mentioned above.

The Revenue representative submitted that there is no provision for transfer of the credit from 100% EOU to DTA; that it is well settled that when the statute prescribes that a particular act is to be done in a particular manner and failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory.

The appellant submitted that the amount in question is still lying in the books of account and, therefore, there is no reason for insisting a pre-deposit of the amount by way of cash.

The Bench observed that the Tribunal in the case of Tecumseh Products India P. Ltd. 2011-TIOL-973-CESTAT-BANG had granted stay on the identical issue and the present case is squarely covered by the decision.

Holding that the direction of pre-deposit made by the Commissioner(A) was not appropriate and proper in law and the case was not decided on merits, the order was set aside and the matter was remanded for a decision without insisting for any pre-deposit.

The appeal was allowed by way of remand.

(See 2014-TIOL-886-CESTAT-MAD)