Pre-deposit waiver and remand followed the challenge to Rule 8(3A) after duty and interest were substantially paid.

Rule 8(3A) of the Central Excise Rules, 2002 was treated as unconstitutional in light of Gujarat High Court authority, and on that basis the Tribunal found a strong prima facie case for complete waiver of pre-deposit. The appellant had already paid the duty with interest, with only a small later shortfall in interest, and had made payment through the CENVAT account. Because the Commissioner (Appeals) had not examined the dispute on merits, the matter was remanded for fresh decision without insisting on pre-deposit.

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Issues: Whether the pre-deposit condition could be waived and the matter remanded for decision on merits in view of the challenge to Rule 8(3A) of the Central Excise Rules, 2002.

Analysis: The appellant had paid the duty along with interest, with only a small shortfall in interest paid later. The Tribunal noted that the Gujarat High Court had declared the condition in Rule 8(3A), requiring payment of duty without utilising CENVAT credit, unconstitutional. In that backdrop, and considering the facts of payment through CENVAT account and the limited delay in interest payment, the appellant was found to have made out a strong prima facie case for complete waiver of pre-deposit. Since the Commissioner (Appeals) had not examined the dispute on merits, remand was considered appropriate.

Conclusion: The pre-deposit requirement was waived and the impugned order was set aside, with the matter remanded to the Commissioner (Appeals) for decision on merits without insisting on pre-deposit.

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