Mercury Fittings Pvt. Ltd. Vs. Commissioner of Central Excise, Chennai-ii - Court Judgment

Excerpt:
central excise act, 1944 - section 35f -pradip kumar das, j. 1. the learned authorised representative on behalf of revenue raised a preliminary objection regarding maintainability of the appeal. he submits that the commissioner (appeals) dismissed the appeal for non-compliance with stay order in terms of section 35f of the central excise act, 1944. he submits that no appeal is maintainable before tribunal against the dismissal of appeal for non-compliance of stay order. he relies upon the following decisions of the tribunal:- (a).aakash cable tv network vs cc and excise, jaipur-ii 2013-tiol-1807-cestat-del (b).venus rubbers vs cce, coimbatore final order no.40596/2013 dt. 22.11.2013 he also relies upon the decision of the hon'ble madras high court in the case of hindustan lever ltd. vs cce (a) chennai - 2006 (202) elt 591 (mad.). he further submits that the hon'ble supreme court in the case of vijay prakash d. mehta vs collector of customs - 1989 (39) elt 178 (sc) held that section 129e of the customs act provides a condition of right of appeal in respect of an appeal against duty demanded or penalty levied. he submits that right to appeal is subject to compliance of predeposit of dues under section 35f of the act. 2. after hearing both sides and on perusal of the records on preliminary issue raised by ld. ar, i find that the issue is no more res integra in view of the decision of the tribunal in the case of girnar transformers pvt. ltd. vs cce kanpur 2014-tiol-305-cestat-del wherein the tribunal after considering various decisions of the high court and supreme court has come to the conclusion that appeal dismissed by the commissioner (appeals) for non-compliance of stay order and the assessee's filed appeal under section 35b is maintainable before the tribunal. the decision of hon'ble madras high court in the case of hindustan lever ltd. (supra) as relied upon by the ld. a.r is not applicable in the facts and circumstances of the present case. in that case, the petitioner was directed by the tribunal to predeposit a sum of rs.50 lakhs on or before 15.3.2006 and on payment of the said predeposit amount, payment of remaining balance part of the duty demanded will stand waived. the petitioner filed a modification application before the tribunal. but the said modification application was dismissed by the tribunal. the petitioner challenged the said order before the hon'ble high court under writ jurisdiction. the hon'ble high court observed that the impugned orders passed by the tribunal are perfectly legal and unassailable and directed the petitioner to comply with the order within 2 weeks. the hon'ble supreme court in the case of vijay prakash d. mehta (supra) as relied upon by ld. a.r is also in different context. in view of the above discussion, respectfully following the decision of the tribunal in the case of girnar transformers pvt. ltd. (supra), the preliminary objection raised by ld. ar is overruled. 3. after hearing both sides at length, i find that appeal itself may be decided at the stage of stay petition hearing. accordingly, after disposing the stay application, appeal is taken up for hearing. 4. the appellant is engaged in the manufacture of parts of precision machined components of automobiles (motor vehicle parts) and for general industrial application classifiable under chapter 87 of the schedule to the central excise tariff act. the appellant was a 100% eou and on 15.9.2011 by debonding by paying the appropriate duty had converted the unit into dta. the appellant had taken the amount of rs.4,64,204/- as opening balance in the cenvat account in the dta unit which was lying unused in 100% eou. the adjudicating authority observed that there is no provision for transfer of credit from eou to dta. the commissioner (appeals) directed the appellant to make a predeposit of 50% of the duty by way of cash against stay application. the appellant filed an application for modification of the stay order in view of various decisions of the tribunal. commissioner (appeals) dismissed the appeal on the ground of non-compliance of stay order. 5. ld. ar submits that there is no provision for transfer of the credit from 100% eou to dta. he reiterates the finding of the adjudicating authority as well as commissioner (appeals). he further submits that it is well settled that when the statute prescribes that a particular act is to be done in a particular manner and failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. 6. i find that the tribunal in the case of tecumseh products india p. ltd. vs cc and c.e - 2011 (269) elt 401 (tri.-bang.) granted stay on the identical issue. it has been observed that prima facie transfer of cenvat credit available in eou account to the dta unit on debonding of eou is permissible. it is further observed that inputs and capital goods on which credit was availed by eou were further utilized in dta unit and therefore they are eligible for credit. ld. advocate contended that the amount in question is still lying in the books of account and therefore there is no reason for insisting for predeposit of the amount by way of cash. he relied upon the decision of the tribunal in the case of birla yamaha ltd. vs cce meerut - 1996 (83) elt 396 (tri.). i find that the present case is squarely covered by the decision of the tribunal in the case of tecumseh products india p. ltd. (supra). so the direction of predeposit by the commissioner (appeals) is not appropriate and proper. 7. in view of the above discussion, i set aside the impugned order passed by the commissioner (appeals). as the commissioner (appeals) has not decided the case on merit, the matter is remanded to the commissioner (appeals) to decide on merit without insisting any predeposit. stay application is disposed of. the appeal is allowed by way of remand.