Court reduces pre-deposit to 7.5% from 10% of interest amount. Appeal reinstated for hearing.

The Court modified CESTAT's order mandating a 10% pre-deposit of interest amount, reducing it to 7.5% of the demand within 4 weeks. The petitioner's appeal, initially dismissed for non-compliance, was reinstated for a hearing on merits upon deposit. The CESTAT was directed to ensure the pre-deposit before proceeding with the appeal. All parties' rights were preserved, and the petition was partly allowed.

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Issues: Challenge to CESTAT's direction for pre-deposit of interest amount; Modification of CESTAT's order; Compliance with pre-deposit requirement for appeal hearing.

In the present case, the petitioner challenged the direction of the CESTAT which mandated a pre-deposit of 10% of the interest amount due, exceeding Rs. 14 lakhs, despite the discharge of the principal liability at the show-cause notice stage by the concerned agency. After hearing both parties, the Court opined that the impugned order's direction needed modification. The Court directed the petitioner to deposit 7.5% of the amount claimed as demand towards interest liability within 4 weeks. Upon this deposit, the CESTAT was instructed to proceed with hearing the appeal on its merits. The previous order of the CESTAT dismissing the appeal for non-compliance with the pre-deposit requirement was set aside. The CESTAT was further instructed to ensure the pre-deposit amount was made before proceeding with the appeal hearing. All rights and contentions of the parties were preserved, and the petition was partly allowed in the stated terms.

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