Pre-deposit in excise appeal upheld where limitation and Cenvat-credit issues were left for final adjudication.

Interference with a Tribunal's pre-deposit direction was declined where the deposit was confined to the demand falling within the normal limitation period, while the extended-period demand had already been excluded. The assessee's reliance on authorities concerning immovable property assembled at site did not, at that interlocutory stage, displace the revenue's case that the goods were manufactured in a factory and cleared in dismantled form. A further plea based on possible Cenvat credit was also not accepted at that stage because the assessee had not taken such credit while opting for the works contract composition scheme, and allowing it could affect that benefit. The merits were left for final adjudication.

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Issues: Whether the Tribunal was justified in directing further pre-deposit under the proviso to Section 35F of the Central Excise Act, 1944, and whether interference was warranted with that direction in the appeal under Section 35G of the Central Excise Act, 1944.

Analysis: The appeal arose from an interlocutory order directing pre-deposit for hearing the assessee's excise appeal on merits. The Court noted that the Tribunal had already excluded the demand relatable to the extended period of limitation and had confined the deposit requirement to the demand within the normal period. The assessee's reliance on decisions concerning immovable property erected at site was held, at this stage, not to displace the revenue's case that the goods were manufactured in the factory and removed in a disassembled condition. The plea based on possible Cenvat credit was also rejected at this stage because the assessee had not taken such credit in order to avail the works contract composition scheme, and permitting credit would affect that benefit. The merits of these contentions were left for final hearing.

Conclusion: No interference was called for with the Tribunal's order directing further pre-deposit, and the challenge to that direction failed.

Final Conclusion: The appellate court declined to modify the pre-deposit condition and the assessee's appeal was rejected, with time only extended for compliance.

Ratio Decidendi: In an appeal against a pre-deposit order, interference is unwarranted where the Tribunal has confined the deposit to the demand within the normal limitation period and the assessee's factual and legal defences are matters for final adjudication.

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