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of <h1>CESTAT Chennai clarifies pre-deposit rules for Central Excise Act appeals, stresses financial hardship assessment</h1> <h3>HARI STEEL RE-ROLLING MILLS Versus COMMISSIONER OF C. EX., CHENNAI-III</h3> HARI STEEL RE-ROLLING MILLS Versus COMMISSIONER OF C. EX., CHENNAI-III - 2004 (177) E.L.T. 1127 (Tri. - Chennai) Issues:1. Compliance with Section 35F of the Central Excise Act for pre-deposit in appeals.2. Consideration of plea of financial hardships by appellate authorities.3. Direction for pre-deposit of interest on duty under Section 35F.Issue 1: Compliance with Section 35F of the Central Excise Act for pre-deposit in appeals:The judgment deals with multiple appeals against orders of the Commissioner (Appeals) dismissing appeals due to non-compliance with Section 35F of the Central Excise Act. The appellants had applied for waiver of pre-deposit and stay of recovery, but the Commissioner (Appeals) directed them to pre-deposit specific amounts, which they did not comply with. The Tribunal found that the plea of financial hardships was not considered by the Commissioner (Appeals), leading to the dismissal of the appeals. The Tribunal, citing relevant case law, set aside the orders and directed the Commissioner (Appeals) to reconsider the stay applications, taking into account the plea of financial hardships and principles of natural justice.Issue 2: Consideration of plea of financial hardships by appellate authorities:The Tribunal emphasized the importance of considering an assessee's plea of financial hardships before directing pre-deposit under Section 35F of the Central Excise Act. It noted that the lower appellate authority erred in not looking into the appellants' financial hardships. Citing a Bombay High Court decision, the Tribunal set aside the orders and directed the Commissioner (Appeals) to reevaluate the stay applications, considering the financial hardships pleaded by the appellants. The Tribunal highlighted the necessity for appellate authorities to assess financial hardships before making decisions on pre-deposit requirements.Issue 3: Direction for pre-deposit of interest on duty under Section 35F:In one of the appeals, the Tribunal addressed the issue of pre-deposit of interest on duty under Section 35F of the Central Excise Act. It clarified that Section 35F does not mandate pre-deposit of interest. The Tribunal found the direction for pre-deposit of interest by the lower appellate authority to be illegal. It emphasized that the authority should dispose of the appeal on its merits in accordance with the law and principles of natural justice. Consequently, the Tribunal set aside the impugned order and allowed the appeal by way of remand, highlighting the incorrectness of the direction for pre-deposit of interest.This judgment from the Appellate Tribunal CESTAT, CHENNAI addressed issues related to compliance with Section 35F of the Central Excise Act for pre-deposit in appeals, the consideration of pleas of financial hardships by appellate authorities, and the incorrect direction for pre-deposit of interest on duty under Section 35F. The Tribunal stressed the importance of assessing financial hardships, set aside the orders that did not consider such pleas, and directed the authorities to reevaluate stay applications while ensuring adherence to the principles of natural justice and legal requirements.
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