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ST - Oral communication of order of pre-deposit is not envisaged in law - no order has been issued as per s.37C - in such scenario, dismissal of appeal for failing to comply with oral directions is not proper - matter remanded: CESTAT

By TIOL News Service

MUMBAI, MAY 07, 2013: THE CCE(A), Pune-II is a learned man. Vide an order dated 13.12.2011 he dismissed the appeal filed by the appellant on the ground that the appellant had not complied with the condition of pre-deposit under the provisions of Section 35F of the Central Excise Act, 1944.

This is what was recorded by him in paragraph 12 of his order -

"I find that the appellants have failed to make a pre-deposit of the entire amount of Service Tax and interest, directed during the course of personal hearing held on 16.11.2011, as required in terms of the provisions of Section 35F of the Central Excise Act, 1944, till date, although they were required to submit compliance thereof by 7.12.2011."

Against this order the appellant is before the CESTAT and submits that they have not received any order from the lower appellate authority for pre-deposit and, therefore, they failed to comply with the direction.

The Bench after extracting the provisions of section 37C of the Central Excise Act, 1944 in the matter of ‘ Service of decisions, orders, summons, etc. ' and the order of the lower appellate authority observed -

"…From the above, it seems that the appellant has been orally communicated and the order of pre-deposit has not been issued as envisaged under section 37C of the Central Excise Act read with section 83 of the Finance Act, 1994.

4. In view of the above, we set aside the impugned order and direct the lower appellate authority to decide the case afresh. In case the appellate authority wants to order for pre-deposit, the same should be communicated in writing as envisaged under section 37C of the Central Excise Act, 1944. Oral communication is not envisaged in law. Thus, the appeal is allowed by way of remand. Stay application is also disposed of.

5. In the meanwhile, status quo to be maintained and the department is directed not to take coercive action against the appellant."

Old habits die hard - So, we are back to square one. Had the proceedings been conducted in the text-book fashion, till this time, Revenue could have got some amount as pre-deposit but this was not to be. Almost Two years have been wasted.

By the way, kindly take a look at this case - (2013-TIOL-547-CESTAT-MUM) reported by us a month ago and spot the similarity.

(See 2013-TIOL-696-CESTAT-MUM)


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