Section 85 of the Finance Act, 1994 --- Appeal — Pre Deposit - The petitioner sought waiver of pre-deposit of 7.5% of duty for maintaining an appeal against the order-in-original dated 26.11.2021. The petitioner claimed that the interest of the revenue is fully protected as the petitioner is entitled to the refund of CENVAT credit which has not been processed yet. The counsel for the petitioner submitted that the demand has been raised on the erroneous premise that the petitioner could not avail the benefit of abatement as it had availed of certain CENVAT credits. The proceedings under Real Estate (Regulation & Development) Act, 2016 (“RERA”), has commenced against the petitioner and the petitioner does not have the adequate funds to make the pre-deposit. The Court observed that it is unable to accept that the petitioner can set off its obligation to make a pre-deposit against its claim for the refund of CENVAT credit. The Counsel for the petitioner stated that the petitioner would make a deposit equal 2.5% of the liability instead of 7.5% to maintain the appeal.

Held that:- The Hon’ble Court directed that if the petitioner deposits an amount equivalent to 2.5% of its liability, the petitioner’s appeal against the order in original would not be rejected solely for want of the requisite pre-deposit.