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ST - While remanding matter, Tribunal can impose condition of pre-deposit - But such power has to be exercised only in judicious manner and not in an arbitrary manner - Order of Tribunal directing pre-deposit set aside: High Court

By TIOL News Service

BANGALORE, APR 29, 2015: THE question before the High Court was whether the Tribunal has the power to impose condition of pre-deposit while remanding the matter. The appellant is aggrieved with the order passed by the Tribunal remanding the matter on the condition of deposit of Rs 40 lakhs.

It has been contended by the appellant that the order has been passed by the Tribunal under Section 35C of the Central Excise Act, 1944 which does not empower the Tribunal to impose any such condition as has been done in the present case. According to the appellant, since the order passed by the adjudicating authority has been set-aside, there was no liability of payment of any Excise Duty on the appellant, and as such, the imposition of the condition of deposit of Rs.40.00 lakhs was beyond the scope of the provision of Section 35C .In the alternative, it has been submitted that in the absence of any reasons having been given for computing the amount of Rs.40.00 lakhs or for imposing any such condition for deposit, the order impugned is liable to be set-aside.

After hearing both sides, the High Court held:

The submission of the appellant, that no reason what-so-ever has been given for imposing such condition of deposit of Rs.40.00 lakhs, has merit. Though in terms of the language of Section 35C , the power of the Tribunal of imposing certain conditions with regard to deposit may be there, while setting-aside and remanding the matter to the Adjudicating Authority, yet the same can be done only with valid reasons and in a judicious manner. There may be cases where the Tribunal may hold that on certain issues, the liability of the assessee to pay excise duty may be there, but not on all issues and thus, after giving reasons, the Tribunal may impose the condition of depositing certain amount, but, not as a routine course and without assigning reasons. There could be other circumstances, such as the assessee adopting dilatory tactics or not coming forward in adducing evidence, for which reason also the Tribunal may impose any such condition of deposit while remanding the matter, so that justice is done, but not in a case like the one in hand, where the Adjudicating Authority has not followed the procedure or given sufficient opportunity to the assessee, because of which the order is set-aside and then a condition of deposit is imposed.

It is clear that though for setting-aside the order passed by the Adjudicating Authority and remanding the case for fresh decision, sufficient reasons have been given, but no reason, whatsoever, has been given for imposing a precondition of deposit of Rs.40.00 lakhs by the appellant . There is even no justification for quantifying the amount Rs.40 lakhs to be deposited by the appellant.

Accordingly, the High Court allowed the appeal by setting aside the condition of pre-deposit imposed by the Tribunal while leaving the other findings undisturbed.

(See 2015-TIOL-1083-HC-KAR-ST)


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: Diretion to pre deposit in remand cases

The provision for making pre deposit is/ was a condition precedent to an appeal being heard on merits, subject to appellate authorities' discretionary powers to waive such pre deposit either in full or in part with such conditions as they may think fit to safeguard the revenue's interest. Once ,in the opinion of an appellate authority ,the impugned order is liable to be set aside for whatever reasons, and the matter remanded for de-novo adjudication, direction for pre deposit at this stage ,with great respect, wouldn't be in accordance with the law. It is a settled point that filing of an appeal is not a vested right, but one created under a statute which can prescribe conditions for filing appeals. Once an appeal has been entertained and order passed remanding for de-novo decision, the law does not envisage pre-deposit at this stage. A related issue that arises is : what happens if the appellant do not comply with such an order. As the order appealed against has been set aside, the same can,nt be enforced either . Can an adjudicating authority still proceed with the de novo adjudication ? This will create a piquant situation. A final word from the apex court on such important question of law is called for soon. S K CHOUDHURY, Former MEMBER, CBEC

Posted by Komala Choudhury
 

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