By TIOL News Service

AHMEDABAD, OCT 23, 2015: THE dispute relates to classification of coal imported by the Petitioner. After the Tribunal ordered pre-deposit of 50% of the duty demand, the Petitioner filed a modification application for waiver of deposit as the Chennai Bench of the Tribunal had referred the matter to the Larger Bench and also in subsequent cases, the Tribunal waived the pre-deposit. However, the Tribunal refused to modify the order and dismissed the appeal for non-compliance with pre-deposit. The assessee is now before the High Court.

After hearing both sides, the High Court held:

+ In Bhatia Global Trading Ltd. v. Commissioner of Customs (Import), Mumbai, - 2015-TIOL-1271-CESTAT-MUM, the Tribunal has noted that the Bench in the case of Mohit Minerals Pvt. Ltd. has taken a view that once the issue has been referred to a Larger Bench, as a convention, waiver of pre-deposit of the amount involved needs to be allowed. In NSL Sugars v. CC, CE & ST, Guntur, the Tribunal by an order dated 5.2.2015 had waived pre-deposit of the liability of duty, interest and penalty and granted stay of all further proceedings in view of the order of reference to the Larger Bench. In Gupta Coal India Pvt. Ltd. v. Commissioner of Customs, Mumbai, the Appellate Tribunal, West Zonal Bench at Mumbai by an order dated 29.4.2015 found that the issue of eligibility of Notification No.12/2012-Cus dated 17.3.2012 to the coal imported by various importers is referred to the Larger Bench of the Tribunal. The court noted that a Coordinate Bench had granted unconditional waiver to the appellants therein on identical issue holding that since the conflict has been referred to the Larger Bench, waiver has been granted till the disposal of the appeal and stay has been granted by the Larger Bench of the Tribunal. The court noted that the Bench is also following the same view that when the matter is referred to the Larger Bench as a convention waiver of pre-deposit is granted. The Bench, accordingly, did not find any reason to deviate from such a view and allowed the application for waiver of pre-deposit and recovery thereof.

+ Thus, from a conspectus of the above decisions of the Tribunal, it is evident that there is a convention that in case where an issue is referred to the Larger Bench as a matter of course, waiver of pre-deposit is granted. In the present case, the petitioner moved the modification application seeking complete waiver of pre-deposit on the ground that the matter had been referred to the Larger Bench of the Tribunal. Prior thereto, the Tribunal in the case of similarly situated assessee, namely, M/s. Rainbow Papers Pvt. Ltd. had by an order dated 8.12.2014, waived pre-deposit in view of the fact that the Chennai Bench of the Tribunal has referred the matter to the Larger Bench.

+ Thus, despite there being a convention of waiving pre-deposit and pre-deposit having been waived in the case of a similarly situated assessee, the Tribunal without recording any reasons as to why the convention should not be followed and the order should not be modified, has simpliciter dismissed the application by a non-speaking order by stating that it did not find any merit in the application filed by the applicant. Merely because the petitioner had earlier filed a stay application wherein there was a direction to make pre-deposit and the petitioner had once again filed an application for modification, was no ground for rejecting the application when the petitioner had moved the application under changed circumstances. As held by this court in the case of Amar Food Products, reference to the Larger Bench would constitute a change of circumstances warranting modification of the interim order.

Accordingly, the High Court waived the pre-deposit and restored the matter before the Tribunal.

(See 2015-TIOL-2466-HC-AHM-CUS)