2010 (9) TMI 367 - HC - Central Excise

High Court Quashes Tribunal's Orders, Restores Appeal for Fresh Consideration

The High Court allowed the petition, quashing the Tribunal's orders and restoring the appeal and stay application for fresh consideration. The Court ... Waiver of pre-deposit – Demand of duty and penalty - Tribunal directed the petitioner to deposit 50% of the total amount – assessee did not deposited the amount - appeal stood dismissed - petitioner had been referred to the Larger Bench – for full waiver of – Held that: - since the pre-deposit had not been made the appeal stood dismissed - Tribunal, referring those appeals to a Larger Bench cannot by itself constitute a change in circumstances so as to warrant modification on that count - reason to modify the order requiring the pre-deposit or to restore the appealThe Tribunal was not justified in dismissing the appeal on the ground of non-payment of amount of pre-deposit. It was further submitted that in the case of Mahavir Food Products v. Commissioner of C.Ex. Vadodara, (2007 -TMI - 1202 - CESTAT, AHMEDABAD ) the said issue has ultimately been held in favour of the assessee - Appeals restored to the file of the Tribunal. Issues:1. Classification of 'Makai Poha' under the Central Excise Tariff Act, 1985.2. Compliance with pre-deposit requirements in appeal proceedings before the Tribunal.3. Justification of dismissing the appeal due to non-compliance with pre-deposit orders.4. Consideration of changed circumstances in the appeal process.Analysis:Issue 1: Classification of 'Makai Poha'The petitioner, engaged in manufacturing 'Prepared maize flakes,' received show cause notices for classification under Chapter 19 Heading 19.04 of the Tariff Act. After rounds of litigation, the Tribunal remanded the matter, leading to conflicting decisions by the adjudicating authority and the Commissioner (Appeals). The Tribunal, relying on a previous decision, directed the petitioner to make a pre-deposit, which was later challenged due to a change in circumstances when the issue was referred to the Larger Bench. The petitioner argued for a modification based on subsequent favorable decisions. The Tribunal dismissed the modification application, leading to the present petition.Issue 2: Compliance with Pre-DepositThe Tribunal initially ordered the petitioner to deposit 50% of the amount payable within eight weeks, with a compliance report due on a specified date. However, before the compliance date, the Tribunal referred the relevant decision to the Larger Bench. The petitioner sought a modification of the pre-deposit requirement due to this change in circumstances. Despite the petitioner's timely action, the Tribunal dismissed the appeal for non-compliance with the pre-deposit order.Issue 3: Justification for Dismissing the AppealThe Tribunal's decision to dismiss the appeal for non-compliance with the pre-deposit order was based on the petitioner's failure to make the required payment by the specified date. The Tribunal maintained that the referral of related appeals to a Larger Bench did not constitute a sufficient change in circumstances to warrant a modification of the pre-deposit requirement.Issue 4: Consideration of Changed CircumstancesThe petitioner argued that the Tribunal's referral of the issue to the Larger Bench should have prompted a reconsideration of the pre-deposit requirement. The petitioner contended that the Tribunal's consistent practice was to grant full waiver in such circumstances. The Tribunal's refusal to modify the pre-deposit order based on the changed circumstances was challenged as unjustified.In the final judgment, the High Court allowed the petition, quashing the Tribunal's orders and restoring the appeal and stay application for fresh consideration. The Court emphasized the need for the Tribunal to reconsider the matter in light of the changed circumstances and provide the petitioner with a fair hearing opportunity.