Case Note & Summary
The appellant, M/s Dhariwal Industries Limited, a manufacturer of Panmasala and Gutka registered under the Central Excise Act, 1944, was issued a show cause notice on 1.8.2012 demanding Central Excise duty. The adjudicating authority confirmed the demand and imposed penalties. The appellant appealed to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which by order dated 20.10.2014 allowed the appeal and remanded the matter back to the Commissioner for de novo adjudication, but imposed a condition that the appellant must deposit Rs.40,00,000/- within 8 weeks as a precondition for the remand. The appellant was aggrieved only by this condition and filed the present appeal under Section 35G of the Central Excise Act. The High Court considered the legal issue of whether CESTAT has the power to impose a pre-deposit condition while remanding a matter. The Court noted that Section 35F of the Central Excise Act empowers the Tribunal to require pre-deposit only in cases where the appeal is to be dismissed for non-compliance or where stay of recovery is sought. Since the Tribunal had allowed the appeal and remanded the matter, it could not impose such a condition. The Court held that the condition was without jurisdiction and set it aside, allowing the appeal in part. The rest of the Tribunal's order remanding the matter was upheld.
Headnote
A) Central Excise - Pre-deposit Condition on Remand - Section 35F of Central Excise Act, 1944 - CESTAT's Power - The issue was whether CESTAT could impose a condition of pre-deposit of Rs.40 lakhs while remanding the matter for de novo adjudication. The High Court held that Section 35F only empowers the Tribunal to require pre-deposit for stay of recovery or dismissal of appeal, not to impose such condition while remanding. The condition was set aside as without jurisdiction. (Paras 1-5) B) Central Excise - Remand for De Novo Adjudication - No Power to Impose Pre-deposit - The Tribunal's order allowed the appeal and remanded the matter, but imposed a condition of deposit. The High Court held that once the appeal is allowed and matter remanded, the Tribunal cannot impose a condition of pre-deposit as it is not a case of stay or dismissal. The condition was quashed. (Paras 3-5)
Issue of Consideration
Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has the power to impose a condition of pre-deposit of duty while remanding the matter back to the adjudicating authority for de novo adjudication?
Final Decision
Appeal allowed in part; condition of pre-deposit of Rs.40,00,000/- set aside; rest of CESTAT order remanding matter upheld.
Law Points
- Pre-deposit condition cannot be imposed while remanding matter for de novo adjudication
- CESTAT's power under Section 35F of Central Excise Act is limited to stay/dismissal of appeal
- not to impose conditions on remand
