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of <h1>Court Overturns Tribunal Order on Duty Pre-Deposit, Emphasizes Detailed Procedure for Evaluation</h1> The court set aside the Customs, Excise & Gold (Control) Appellate Tribunal's order for a pre-deposit of duty amount under the Central Excises and ... Stay/Dispensation of pre-deposit Issues:Challenge to order of Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) for pre-deposit of duty amount under Central Excises and Salt Act, 1944. Interpretation of Section 35F of the Act regarding deposit pending appeal. Application of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) in waiving pre-deposit conditions.Analysis:The petitioner, a sick industrial company under SICA, sought to quash the CEGAT's order directing a pre-deposit of duty amount for an appeal. The petitioner contended that it pays duty on chassis under Heading 87.06 of the Central Excise Tariff, and the fully built vehicles suffer excise duty under Heading 87.02 by an independent body builder before sale. The petitioner argued against the demand for excise duty on fully built vehicles, citing a judgment of the Patna High Court. The CEGAT directed a pre-deposit of Rs. 1.40 crores for an appeal against a duty demand of Rs. 2,75,31,417. The petitioner challenged this order, relying on a judgment related to a sick undertaking exempt from pre-deposit requirements.The petitioner invoked Section 35F of the Act, which mandates deposit pending appeal, subject to undue hardship considerations by the appellate authority. The petitioner highlighted Section 22 of SICA, suspending legal proceedings for sick industrial companies. The court noted that the CEGAT did not assess the undue hardship or the petitioner's prima facie case adequately. The court emphasized the need for a detailed procedure under SICA for rehabilitation or financial assistance to sick industrial companies. It rejected the automatic waiver of pre-deposit under SICA, emphasizing the appellate authority's duty to evaluate undue hardship and safeguard revenue interests. Consequently, the court set aside the pre-deposit condition and directed the appeal to be heard without such requirement, allowing the petition with no costs incurred.
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