2010(10)LCX0140

IN THE CESTAT, WEST ZONAL BENCH, MUMBAI [COURT NO. I]

S/Shri P.G. Chacko, Member (J) and M. Veeraiyan, Member (T)

Manak Motiforgings Pvt. Ltd.

Versus

Commissioner of Central Excise, Aurangabad

Final Order No. A/341/2010-WZB/C-II/EB, dated 12-10-2010 in Appeal No. E/2782/2003

Advocated By -

None, for the Appellant.
Shri Manish Mohan, SDR, far the Respondent.

[Order per : P.G. Chacko, Member (J)]. -

In this appeal of the assessee, the challenge is against the appellate Commissioner's order dismissing the as-sessee's appeal (filed against an adverse order of the original authority) for noncompliance with Section 35F of the Central Excise Act. There is no representation for the appellant today despite notice, nor is there any request for adjournment.


2. We have examined the records and heard the learned SDR.


3. In adjudication of a show cause notice, the original authority had confirmed demand of duty of Rs. 57,500/- against the assessee and imposed on them equal amount of penalty. Aggrieved by the order, the assessee preferred an appeal to the Commissioner (Appeals) and also filed therein an application for waiver of pre-deposit under Section 35F of the Central Excise Act. In the said application, the appellate authority directed the appellant to pre-deposit an amount of Rs. 1.00 lakh. The appellant debited the amount in their MODVAT account and claimed that they had complied with the direction for pre-deposit under Section 35F. The appellate authority did not accept this to be 'due compliance' with Section 35F. He took the view that the above amount of Rs. LOO lakh should have been deposited through TR-6 challan. On this basis, the assessee's appeal came to be dismissed for non-compliance with Section 35F.


4. After hearing the learned SDR, we are of the view that pre-deposit of the duty amount by way of debit in MODVAT account can be accepted as sufficient compliance with Section 35F and, therefore, the assessee need not be called upon to make any payment towards penalty through TR-6 challan. However, we are in agreement with the appellate Commissioner's view that any amount of penalty cannot be deposited through debit in MODVAT account. In the present case, debit of Rs. 57,500/- (duty) in the MODVAT account is an admitted fact and the same would suffice the purpose of Section 35F. In the circumstances, the learned Commissioner (Appeals) has to consider the assessee's appeal on merits in accordance with law. Therefore, after setting aside the impugned order, we request the Commissioner (Appeals) to dispose of the assessee's appeal against the order-in-original, on merits without insisting on any further pre-deposit. Needless to say that the appellant should be given a reasonable opportunity of being heard.


5. Appeal stands allowed by way of remand.

(Pronounced in Court)

Equivalent 2011 (264) ELT 0100 (Tri. - Mumbai)