Customs, Excise and Gold Tribunal - Delhi
M/S Sikri Steels (P) Ltd. vs Cce, Chandigarh on 2 March, 2001
ORDER
P.G. Chacko:
1. This application is for waiver of predeposit of penalty. The penalty as imposed by the adjudicating authority and affirmed by the lower appellate authority consists of two elements,namely, penalty under Section 11AC of the Central Excise Act equal to the duty amount of Rs.1,88,997/- and penalty under Rule 173Q of the Central Excise Rules amounting to Rs.25,000/-.
2. On a careful examination of the records and on hearing both sides, I find that this is a fit case for final disposal at this stage itself, having regard to the particular fact that the impugned order is not an order on the merits of the disputes.
3. The adjudicating authority had disallowed modvat credit to the extent of Rs.1,88,997/- on certain grounds and imposed penalties as above on the party. The aggrieved assessee went in appeal to the Commissioner (Appeals). They also filed an application therein praying for waiver of predeposit of the penalty amounts the duty having already been paid by way of debit in RG 23G part-II. The lower appellate authority considered the stay application, heard the applicants and passed order dated 23.5.2000 directing them to deposit an amount of Rs.2 lakhs within a period of 15 days for purposes of Section 35F of the Central Excise act. The party did not comply with the direction. Later on, ld. Commissioner (Appeals) rejected the assessee's appeal on account of non-compliance with the provisions of Section 35F ibide as per order dated 14.9.2000. That order was passed without affording any personal hearing to the appellants. Therefore, in the present appeal before the Tribunal, the appellants are mainly aggrieved by negation of natural justice.
4. I have heard ld. Advocate Sh. K.K. Anand for the appellants and ld. JDR Sh. Swatantra Kumar for the Revenue.
5. Ld. Counsel submits that the penalty of Rs.1,88,997/- imposed on the assessees under Section 11AC of the Act is not sustainable in law inasmuch as the provisions of the said section are not applicable to demands of duty under modvat rules. As regards the penalty imposed on 173Q of the Central Excise Rules, he has no case that the provisions of the said rule are not applicable to demands under modvat rules. As regards the argument with reference to Section 11AC of the act, the appellants appear to have a strong prime facie case, though in relation to the other submission, I do not find any such case. I , therefore, hold the view that the requirement of pre-deposit under Section 35F in respect of the entire amount of penalty imposed under Section 11AC has to be waived completely and the like requirement in respect of the penalty imposed under Rule 173Q needs to be fulfilled for purpose of hearing their appeal on merits before the lower appellate authority.
6. In view of the above findings, I set aside the impugned order and allow this appeal by way of remand, directing ld. Commissioner (Appeals) to pass a speaking order on the merits of the dispute after affording a reasonable opportunity of personal hearing to the appellants, subject to condition that an amount of Rs.25,000/- be deposited by the appellants to meet the requirements of Section 35F within a period of six weeks from today. It is made clear that there shall be no requirement for pre-deposit in respect of the amount of penalty imposed under Section 11AC and that any departmental proceedings for recovery of such amount will stand stayed during the pendency of the appeal before the lower appellate authority.