Statutory pre-deposit under excise law is an overall ceiling, and excess deposit is refundable without section 11B

For second appeals under section 35F of the Central Excise Act, the 10% statutory pre-deposit is an overall ceiling and the amount already deposited at the first appellate stage must be counted toward that requirement. Where the earlier 7.5% deposit and the later Tribunal deposit together exceed the statutory threshold, the excess is refundable. That refund is not treated as a refund of duty and therefore does not attract section 11B. The result is that further recovery of any amount beyond the statutory pre-deposit is unsustainable, with consequential relief available to the assessee.

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Issues: Whether, for a second appeal before the Tribunal, the statutory pre-deposit of 10% under section 35F of the Central Excise Act, 1944 is to be computed inclusive of the 7.5% already deposited at the first appellate stage, and whether refund of excess pre-deposit is recoverable under section 11B of the Central Excise Act, 1944.

Analysis: The statutory scheme of section 35F requires a total pre-deposit of 10% for filing the appeal before the Tribunal, and the amount deposited at the first appellate stage is to be taken into account while computing that ceiling. The appellant had already deposited 7.5% before the Commissioner (Appeals) and thereafter deposited 10% before the Tribunal, resulting in an excess deposit over the statutory requirement. The refund of the excess pre-deposit was correctly allowed, and such refund is not to be treated as a refund of duty attracting section 11B.

Conclusion: The demand for further recovery was unsustainable, and the appeal was allowed in favour of the assessee.

Final Conclusion: The impugned order was set aside and the assessee retained entitlement to the consequential relief flowing from the excess pre-deposit.

Ratio Decidendi: For an appeal under section 35F of the Central Excise Act, 1944, the statutory pre-deposit of 10% is computed as an overall ceiling inclusive of the amount already deposited at the first appellate stage, and refund of excess pre-deposit does not fall under section 11B.

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