Director's Pre-Deposit Requirement Under Central Excise Act The Tribunal held that under Section 35F of the Central Excise Act, a Director of a Private Limited Company is required to make a separate pre-deposit of ...
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Director's Pre-Deposit Requirement Under Central Excise Act
The Tribunal held that under Section 35F of the Central Excise Act, a Director of a Private Limited Company is required to make a separate pre-deposit of 7.5% of the penalty imposed on him, distinct from any deposit made by the company, for his appeal to be considered. The Tribunal dismissed the Director's application but granted him four weeks to comply with the pre-deposit requirement. Failure to comply by the specified deadline would result in the appeal not being entertained.
Issues: 1. Whether the Director is required to make a separate pre-deposit in terms of Section 35F of the Central Excise ActRs.
Analysis:
The case involved a miscellaneous application filed against an Order-in-Original confirming a demand for Customs Duty along with penalties and interest. The adjudicating authority had imposed a penalty on the Director of the company in addition to the demand on the company. The Director argued that since the company had already made a deposit, he should be exempt from making a separate deposit. The contention was opposed by the Departmental Representative, stating that the Director, as a separate legal entity, is required to make a separate pre-deposit as per Section 35F.
Upon considering the submissions, the Tribunal noted that under Section 35F of the Central Excise Act, a deposit of 7.5% of the demand is mandatory before an appeal can be entertained. The Tribunal emphasized that the Private Limited Company and its Directors are distinct legal entities, and since separate penalties were imposed, the Director must make a pre-deposit of 7.5% of the penalty imposed on him for his appeal to be considered.
Accordingly, the Tribunal dismissed the miscellaneous application but granted the Director a four-week period to make the necessary pre-deposit. It was specified that compliance with the pre-deposit requirement would result in the appeal being listed along with the company's appeal. The compliance deadline was set for 15-3-2018, and the order was pronounced in open court on 12-2-2018.
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