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of <h1>Appellant ordered to deposit Rs. 3.50 crores, balance waived, recovery stayed pending appeal, Settlement Commission order considered.</h1> <h3>M/s Loknath Prasad Gupta Versus CCE, New Delhi</h3> M/s Loknath Prasad Gupta Versus CCE, New Delhi - TMI Issues:Prayer to dispense with pre-deposit of confirmed duty and penalty under Section 11AC for the period 1.4.2006 to 29.2.08. Confirmation of duty against the appellants for manufacturing Chewing Tobacco (Khaini) due to the use of lime dissolved in water. Dispute over excess production and clearance leading to duty confirmation. Background of a previous case against the appellant involving a demand of Rs. 57 crores. Appeal against Settlement Commission's order, admission of writ petition in the High Court, and Supreme Court's direction for installment deposits. Revenue's insistence on pre-deposit based on the impact of water addition on production. Consideration of Settlement Commission's order suggesting 10% excess production and direction to deposit Rs. 3.50 crores within 12 weeks.Analysis:1. The primary issue in this case revolves around the appellant's request to dispense with the pre-deposit of confirmed duty and penalty under Section 11AC for the period in question. The duty was confirmed against the appellants due to their involvement in the manufacturing of Chewing Tobacco (Khaini) using lime dissolved in water. The Revenue contended that the addition of water resulted in excess production and clearance, leading to the duty confirmation.2. The judgment highlighted a previous case where a significant demand of Rs. 57 crores was raised against the appellant, partly based on the same grounds of excess production due to water addition. The Settlement Commission had ruled on this matter, enhancing the production by 10% and imposing duty and penalty accordingly. The appellant disputed this order, leading to a writ petition in the High Court and the Supreme Court directing installment deposits.3. The Revenue insisted on the pre-deposit of the entire duty amount, emphasizing the impact of water addition on production. However, the Tribunal considered the Settlement Commission's order, which suggested a 10% excess production due to water addition. The Tribunal directed the appellant to deposit Rs. 3.50 crores within 12 weeks, subject to which the balance amount of duty and penalty would be waived and recovery stayed during the appeal's pendency.4. The Tribunal's decision was based on a prima facie assessment, taking into account the Settlement Commission's order and the pending writ petition in the High Court. The appellant's financial hardship claims were not substantiated with evidence, leading to the Tribunal's directive for the specified deposit amount and the stay on further recovery pending compliance.5. Overall, the judgment carefully considered the factual and legal aspects of the case, balancing the interests of both parties while upholding the principles of natural justice and due process. The detailed analysis of the previous case, the Settlement Commission's order, and the ongoing legal proceedings ensured a fair and reasoned decision in the matter of the pre-deposit requirement.
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