Tribunal remands case for reconsideration without pre-deposit, allows compliance via MODVAT account. Fair hearing ensured.

The Tribunal allowed the appeal by remanding the case back to the Commissioner (Appeals) for reconsideration without the need for further pre-deposit. The Tribunal held that pre-depositing the duty amount by debiting the MODVAT account constituted compliance with Section 35F, eliminating the necessity for payment through a TR-6 challan. The appellant was granted a reasonable opportunity to present their case, emphasizing fair hearing procedures.

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Issues:
Challenge against appellate Commissioner's order for non-compliance with Section 35F of the Central Excise Act.

Analysis:
The appeal was filed by the assessee against the appellate Commissioner's order, which dismissed the appeal due to non-compliance with Section 35F of the Central Excise Act. The appellant did not have any representation during the hearing, and no request for adjournment was made. The original authority had confirmed a duty demand of Rs. 57,500/- and imposed an equal penalty on the assessee. The appellant appealed to the Commissioner (Appeals) and applied for a waiver of pre-deposit under Section 35F. The appellate authority directed the appellant to pre-deposit Rs. 1.00 lakh, which the appellant debited in their MODVAT account. However, the appellate authority did not consider this as 'due compliance' with Section 35F, stating that the amount should have been deposited through a TR-6 challan. Consequently, the appeal was dismissed for non-compliance with Section 35F.

Upon examination and hearing the learned SDR, the Tribunal opined that pre-depositing the duty amount by debiting the MODVAT account could be considered sufficient compliance with Section 35F. Therefore, the assessee was not required to make any payment towards penalty through a TR-6 challan. However, the Tribunal agreed that penalty amounts cannot be deposited through the MODVAT account. In this case, the debit of Rs. 57,500/- (duty) in the MODVAT account was accepted as meeting the requirements of Section 35F. The Tribunal set aside the impugned order and directed the Commissioner (Appeals) to reconsider the assessee's appeal on its merits without insisting on any further pre-deposit. It was emphasized that the appellant should be given a reasonable opportunity to be heard.

The Tribunal allowed the appeal by way of remand, indicating that the Commissioner (Appeals) should dispose of the assessee's appeal against the original order on its merits without requiring additional pre-deposit.

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