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When CENVAT credit is available to safeguard the interest of revenue, insistence upon further pre-deposit would cause undue hardship.
Facts
A Show Cause Notice was issued and the demand was confirmed by the adjudicating authority. An appeal was filed before the CESTAT which ordered pre-deposit and directed that the amount already paid should be adjusted against such pre-deposit amount. At the time of verification of the amount already paid, a request was made by the Appellant to adjust the CENVAT credit against the order of pre-deposit.
The revenue did not consider this request and also issued a verification report that payments already made pertained to their regular liability and thus could not be adjusted against the pre-deposit. The Tribunal dismissed the appeal for non-compliance of the order of stay.
Held
The High Court observed that the Tribunal was required to consider the prima facie case, balance of convenience, irreparable loss and injury and financial hardship and thus the order passed without taking into account all the parameters, was arbitrary and unsustainable. Accordingly it was held that when the CENVAT credit was available, which would safeguard the interest of Revenue, insistence upon further deposit would cause undue hardship and further prima facie case was also established for waiver of pre-deposit. Thus, the Court reduced the amount of further deposit having regard to the availability of CENVAT credit and directed the Tribunal to restore the appeal.
