High Court modifies order, requires solvent security instead of cash deposit. Clear timelines set for further proceedings.

The High Court allowed the appeal in part, modifying the impugned order by directing the appellant to provide solvent security instead of a cash deposit. The Court set clear timelines for further proceedings and directed the adjudicating authority to pass appropriate orders based on the reply filed by the appellant within three months.

---

---

Issues Involved:
Appeal under Section 35G of the Central Excise Act, 1944 against the order of Customs, Excise & Service Tax Appellate Tribunal, New Delhi involving two substantial questions of law: 1. Imposition of a pre-deposit of Rs. 30 lakhs by the Tribunal, and 2. Remanding the case without setting aside the Commissioner's order.

Analysis:

Issue 1: Imposition of Pre-deposit by the Tribunal
The appellant (assessee) was served with a show cause notice demanding central excise duty, but failed to file a reply, leading to an adverse order by the adjudicating authority. The Tribunal set aside this order, remanding the case for the appellant to file a reply. However, the Tribunal directed the appellant to deposit Rs. 30 lakhs as a pre-condition to file the reply. The High Court found no justification for this direction, as the matter was remanded for enquiry without any adjudication order determining the liability. The Court held that the appellant must only furnish solvent security to the satisfaction of the dues proposed to be recovered from them, which can be used if the appellant fails to pay the demanded amount after an adverse order.

Issue 2: Remanding the Case without Setting Aside Commissioner's Order
The Tribunal remanded the case to the adjudicating authority due to the appellant not being given an opportunity to be heard. The High Court agreed with this decision but disagreed with the imposition of a cash deposit. The Court directed the appellant to furnish solvent security instead. The Court also set a timeline for the appellant to file a reply to the show cause notice and for the adjudicating authority to decide the case within three months from the date of filing the reply, emphasizing no adjournments if the reply is not filed timely.

In conclusion, the High Court allowed the appeal in part, modifying the impugned order by directing the appellant to provide solvent security instead of a cash deposit. The Court also set clear timelines for further proceedings and directed the adjudicating authority to pass appropriate orders in accordance with the law based on the reply filed by the appellant.

---