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of <h1>High Court Reduces Pre-Deposit for Industrial Undertaking in CESTAT Challenge, Considers Financial Hardship</h1> The High Court reduced the pre-deposit requirement for an industrial undertaking challenging a CESTAT order from Rs. 40 Lacs to Rs. 25 Lacs, considering ... Waiver of pre deposit - notification dated 31-7-2001 - whether the petitioner’s investments in its industrial undertaking after 31-12-2005 would qualify for exemption by virtue of Notification dated 31-7-2001 is a debatable question - the petitioner has not maintained separate accounts and therefore it is not possible to segregate benefits of exemption notification on investments of the petitioner pre and past 31-7-2005, such exemption benefits in the present case have been denied in entirety - Considering the totality of the facts and circumstances of the case, we reduce the pre-deposit requirement to Rs. 25 Lacs - petition is disposed of Issues:1. Challenge to pre-deposit requirement before CESTAT.2. Interpretation of exemption notification dated 31-7-2001 regarding investments made after 31-12-2005.3. Financial hardship of the petitioner in meeting the pre-deposit requirement.Analysis:1. The petitioner, an industrial undertaking, challenged an order by CESTAT requiring a pre-deposit of Rs. 40 Lacs to maintain its appeal before the Commissioner (Appeals). The petitioner set up an industry in Kutch region and sought exemption under a notification dated 31-7-2001 for investments made after 31-12-2005. The revenue contended that investments post 31-12-2005 do not qualify for exemption under the notification. The Tribunal reduced the pre-deposit requirement to Rs. 40 Lacs, representing 25% of the revenue's demand, pending the appeal before the Commissioner (Appeals).2. The petitioner argued that the notification does not disqualify investments made after 31-12-2005 and highlighted the financial hardship the company would face due to the pre-deposit requirement. On the other hand, the revenue argued that the circular is clear and that the Tribunal did not rely on a particular notification that was struck down by the court in a previous case. The High Court found the question of whether the petitioner's post-31-12-2005 investments qualify for exemption to be debatable and pending before the Commissioner (Appeals).3. Despite not waiving the entire pre-deposit requirement, the High Court considered the petitioner's financial condition, noting the company's losses over the years and its cash on hand. To alleviate some burden, the pre-deposit requirement was reduced to Rs. 25 Lacs, to be deposited by a specified date for the appeal to be considered on merits by the Commissioner (Appeals). The Court disposed of the petition with these directions.
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