Further pre-deposit waived where duty was already paid and the excise demand procedure remained under challenge

Further pre-deposit was not required where the assessee had already discharged the duty liability through CENVAT credit and a legal challenge remained to the demand procedure under Rule 8(3A). The tribunal noted that the cited High Court view required a show cause notice under Section 11A of the Central Excise Act even in cases of alleged default, and held that the appeal should be heard on merits without insisting on any additional deposit. The dismissal for non-deposit was set aside, and the matter was remanded to the Commissioner (Appeals) for merits adjudication.

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Issues: Whether the appellant was required to make further pre-deposit before its appeal could be heard on merits in a case involving alleged contravention of Rule 8(3A) and recovery of central excise duty.

Analysis: The appellate tribunal noted that the High Court view relied upon by the appellant required issuance of a show cause notice under Section 11A of the Central Excise Act, 1944 even where default under Rule 8(3A) was alleged. It also recorded that the appellant had since paid the entire duty amount through CENVAT credit. In these circumstances, the tribunal held that a further pre-deposit was not necessary for hearing the appeal and that the Commissioner (Appeals) had not decided the dispute on merits.

Conclusion: The appellant was entitled to relief against insistence on further pre-deposit, and the matter was remanded to the Commissioner (Appeals) for decision on merits without requiring any additional deposit.

Final Conclusion: The order of dismissal for non-deposit was set aside and the appeal proceedings were restored for adjudication on merits.

Ratio Decidendi: Where the assessee has already discharged the duty liability and a prima facie legal basis exists for challenging the demand procedure, insistence on further pre-deposit may be dispensed with and the appeal must be heard on merits.

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