Court Requires Additional Deposit for Appeal Hearing

The court partially allowed the appeal, directing the appellant to deposit an additional Rs.49 lacs, in addition to the Rs.25 lacs already deposited, for the appeal hearing. If the appellant complied and deposited the amount within one month, the appeal would be considered and decided on merits within two months thereafter.

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Issues:
Challenge to order requiring deposit for appeal hearing.

Analysis:
The appellant challenged an order by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) requiring a deposit of Rs.1 crore for the hearing of its appeal. The appellant argued that the sales by another company should not be considered as its own, as the companies had different directors, maintained separate balance-sheets, and had separate PAN account numbers. The appellant's balance-sheet showed net profits of Rs.1.81 lacs only. The appellant requested a reduction in the required deposit.

The revenue argued that valid reasons were provided for levying duty on the appellant based on assessment and CESTAT orders. The CESTAT had already directed the appellant to deposit Rs.1 crore. After hearing both parties and reviewing the assessment and CESTAT orders, the court found that while the revenue's position may not be entirely incorrect, the appellant's financial distress was evident from its balance-sheet. The court partially allowed the appeal, directing the appellant to deposit an additional Rs.49 lacs, in addition to the Rs.25 lacs already deposited, for the appeal hearing. If the appellant complied and deposited the amount within one month, the appeal would be considered and decided on merits within two months thereafter.

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