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2017 (4) TMI 894 - AT - Central ExciseWaiver of pre-deposit - Section 35F of the CEA, 1944 - appellant claim that right of appeal accrues on the date of initiation of the assessment proceedings. Therefore the law prevailing on that date shall be relevant and not law on the date of its decision or the date of filing of appeal. Therefore, in this case the mandatory deposit of 7.5% is not applicable - Revenue claims that the pre-deposit of 7.5% is the requirement for filing appeal before this Tribunal which became effective from the enactment of the Finance Bill, 2014. Therefore, the initiation of the proceeding is not relevant for the purpose of mandatory pre-deposit of 7.5%. Held that - From a plain reading of the aforesaid Section 35F, it is clear that the pre-deposit of 7.5% is pre-requisite for filing appeal in this Tribunal and it is not related to proceedings of the appeal. Therefore, deposit of 7.5% is requirement for filing the appeal before this Tribunal. Therefore, the submission of ld. counsel that it is to be taken from the date of initiation of the proceedings is absolutely irrelevant. If the legislators have any intention not to collect 7.5% in cases where the proceedings have been initiated prior to enactment of Finance Bill, 2014, the same would have been incorporated in amended Section 35F explicitly. In the absence of such explicit provision, there is no scope for interpretation that the 7.5% is required only in cases wherein the proceedings have been initiated on or after the amended section 35F in the Finance Bill, 2014. Reliance placed in the case of Nimbus Communications Limited, Versus Commissioner of Service Tax, Service Tax-VI, & Others 2016 (8) TMI 451 - BOMBAY HIGH COURT , where it was held that On and after the enforcement of the provision of Section 35F of the Act, as amended, an appellant has to deposit the duty and penalty as stipulated and unless the appellant were to do so, the Tribunal shall not entertain any appeal. The applicant is required to make a pre-deposit of 7.5% of the adjudged dues which the applicant failed to do so - the appeal is not maintainable for want of pre-deposit in terms of Section 35F. Appeal dismissed being non-maintainable.
Issues Involved:
1. Application for dispensing with the pre-deposit of penalty. 2. Applicability of the amended Section 35F for pre-deposit requirements. 3. Jurisdictional High Court's binding judgment on the Tribunal. 4. Consequences of non-compliance with pre-deposit requirements. Detailed Analysis: 1. Application for Dispensing with the Pre-Deposit of Penalty: The applicant sought to dispense with the pre-deposit of 7.5% of the penalty amounting to ?25 lakhs. The applicant's counsel argued that the case pertains to a period before the amendment of Section 35F on 06.08.2014, thus the unamended Section 35F should apply. The unamended section allowed the Tribunal discretion to entertain stay applications without the pre-deposit requirement. The counsel cited several judgments to support the argument that the right of appeal accrues on the date of initiation of assessment proceedings, and thus the law at that time should prevail. 2. Applicability of the Amended Section 35F: The respondent, represented by the Asstt. Commissioner, contended that the mandatory pre-deposit of 7.5% became effective from the enactment of the Finance Bill, 2014. He argued that the initiation of proceedings is irrelevant for the purpose of mandatory pre-deposit. The Tribunal examined the amended Section 35F, which explicitly requires a pre-deposit of 7.5% for filing an appeal. The Tribunal noted that if the legislators intended to exempt cases initiated before the amendment, it would have been explicitly stated in the amended section. 3. Jurisdictional High Court's Binding Judgment: The Tribunal referred to the judgment of the Jurisdictional High Court in the case of Nimbus Communications Ltd., which held that the compliance of the 7.5% deposit is required for appeals filed after 06.08.2014, even if the show-cause notice was issued prior to the amendment. The High Court clarified that the amended Section 35F applies to all appeals filed on or after its enforcement date, and only pending appeals before the amendment are exempted from the pre-deposit requirement. 4. Consequences of Non-Compliance with Pre-Deposit Requirements: The Tribunal concluded that the applicant's failure to make the pre-deposit of 7.5% rendered the appeal non-maintainable. Despite being offered a reasonable time to comply, the applicant's counsel declined. Consequently, the Tribunal dismissed the appeal for non-compliance with the pre-deposit requirement under Section 35F. The applications for stay and condonation of delay were also dismissed as infructuous due to the dismissal of the main appeal. Conclusion: The Tribunal upheld the mandatory pre-deposit requirement of 7.5% as per the amended Section 35F for appeals filed after 06.08.2014. The appeal was dismissed for non-compliance, and the applications for stay and condonation of delay were rendered infructuous. The judgment emphasized the binding nature of the Jurisdictional High Court's interpretation of the amended Section 35F.
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