2018 (6) TMI 990 - AT - Central Excise

Tribunal allows appeal delay, sets aside order due to compliance, case remanded for further review

The Tribunal condoned a 10-day delay in filing the supplementary appeal due to the timely filing of the main appeal. The appellant, engaged in ... Condonation of delay - pre-deposit under Section 35F - mandatory pre-deposit - remand for decision on merits - CENVAT credit and compliance with Rule 6(2) of CENVAT Credit Rules, 2004 - apportionment of common input/input services between dutiable and exempted activitiesCondonation of delay - Condonation of delay of 10 days in filing the supplementary appeal. - HELD THAT: - The appellant filed a miscellaneous application seeking condonation of 10 days' delay in filing the supplementary appeal, stating that the main appeal had been filed on time. The Tribunal noted that the main appeal was filed within time and, on that basis, exercised its discretion to condone the 10-day delay in filing the supplementary appeal.Delay of 10 days in filing the supplementary appeal is condoned.Pre-deposit under Section 35F - mandatory pre-deposit - remand for decision on merits - CENVAT credit and compliance with Rule 6(2) of CENVAT Credit Rules, 2004 - apportionment of common input/input services between dutiable and exempted activities - Validity of dismissal of appeals by Commissioner (Appeals) for non-compliance of mandatory pre-deposit under Section 35F where appellant had made the prescribed pre-deposit. - HELD THAT: - The appeals arose from confirmed demands relating to the appellant's alleged failure to maintain separate accounts for inputs/input services used in taxable and exempted activities, and the consequent recovery of CENVAT credit. The Commissioner (A) dismissed the appeals for non-compliance with the mandatory pre-deposit requirement under Section 35F. The Tribunal examined the record and the concessions made by the departmental representative, noting that the appellant had in fact made a pre-deposit equal to 7.5% of the amount confirmed in the order-in-original prior to filing the appeal before the Commissioner (A), and had deposited 2.5% of the demand before the Tribunal. In view of this material, the Tribunal held that the dismissal for non-compliance was not sustainable, set aside the impugned order of dismissal, and directed that the appeals be decided on merits by the Commissioner (A).Impugned order of dismissal under Section 35F is set aside; appeals are remitted to the Commissioner (A) for adjudication on merits.Final Conclusion: The Tribunal condoned the 10-day delay in filing the supplementary appeal, set aside the Commissioner (A)'s dismissal of the appeals under Section 35F because the appellant had made the requisite pre-deposit, and remitted the matters to the Commissioner (A) for fresh adjudication on merits. Issues:1. Delay in filing supplementary appeal.2. Dismissal of appeals for non-compliance of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944.3. Applicability of pre-deposit requirements.4. Compliance with statutory requirements.Analysis:1. The appellant sought condonation of a 10-day delay in filing the supplementary appeal, stating that the main appeal was filed on time. The Tribunal, considering the timely filing of the main appeal, condoned the delay in filing the supplementary appeal.2. The appeals were filed against a common impugned order dismissing them for non-compliance with mandatory pre-deposit under Section 35F of the Central Excise Act, 1944. The appellant was engaged in manufacturing prefabricated buildings and trading goods, availing CENVAT credit without maintaining separate accounts for dutiable and exempted activities. The lower authority confirmed demands and penalties, leading to the appeal before the Commissioner (A).3. During the hearing, the appellant claimed compliance with pre-deposit requirements, contending that the Commissioner (A) erroneously found non-compliance. The appellant argued that the pre-deposit was made, supported by corresponding challans. The departmental representative acknowledged the pre-deposit made by the appellant before both the Commissioner (A) and the Tribunal.4. The Tribunal, after reviewing the records and arguments, found that the dismissal of the appeal by the Commissioner (A) for non-compliance with Section 35F was unsustainable. It was noted that the appellant had indeed made a pre-deposit of the required amount. Consequently, the Tribunal set aside the impugned order and remanded the case back to the Commissioner (A) for a decision on the appeals' merits.This detailed analysis highlights the issues of delay in filing the supplementary appeal, the pre-deposit requirements under Section 35F, compliance with statutory obligations, and the Tribunal's decision to remand the case for further consideration based on the appellant's fulfillment of pre-deposit obligations.