2015 (4) TMI 489 - AT - Central Excise

Waiver of pre deposit - appeal were filed before the amendment - Non compliance with pre deposit condition - Amendment in Section 35F - Held that - In view of the section 35F, the statute provides that appeal shall be entertained only when the 7.5% or 10% as the case may be of duty is deposited. - as regard appeal procedure in this appellate Tribunal, the moment appeal is filed, it attains the stage of entertaining the appeal by the Tribunal. Unlike procedure in the Hon ble High Court and Hon ble Supreme Court, there is no procedure in this Appellate Tribunal for motion hearing on admission of the appeal. In this Tribunal when the appeal is filed it is registered and appeal number is allotted and thereafter the appeal is matured for considering on merit. Therefore since there is no provision of admission of the appeal in this Tribunal the moment the appeal is filed it stands admitted and become due for consideration on merit. Therefore the mandatory deposit of 7.5% or 10% as the case may be is required to be deposited by the appellant and to be complied at the time of filing of the appeal itself. - After the amendment, intention of the legislature is that instead of 100% of the adjudged dues the appellant is required to pay only 7.5% or 10% as the case may be of the duty or penalty. Therefore it cannot be interpreted that as per the amended Section 35F now the appellant can file the appeal without any deposit - as per Section 35F of Central Excise Act, 1944 and Section 129E of Customs Act, 1962, the appellant is required to deposit 7.5% of duty amount before filing of appeal and to furnish the proof of such payment alongwith appeal filed in this Tribunal. Therefore, we direct the appellant to deposit required amount of 7.5% of the duty including amount already deposited - Decided against assessee.

Issues Involved:
1. Interpretation of Section 35F of the Central Excise Act, 1944 regarding the mandatory pre-deposit of 7.5% of the duty amount.
2. The timing of the mandatory pre-deposit for the appeal to be entertained by the Tribunal.

Issue-Wise Detailed Analysis:

1. Interpretation of Section 35F of the Central Excise Act, 1944 regarding the mandatory pre-deposit of 7.5% of the duty amount:

The primary issue in this case revolves around the interpretation of Section 35F of the Central Excise Act, 1944, which mandates a pre-deposit of 7.5% of the duty amount for the appeal to be entertained by the Tribunal. The appellant argued that the term "entertain" should be interpreted to mean that the pre-deposit is required only when the appeal is taken up for hearing on merits. The appellant supported this interpretation by citing various judicial precedents, including judgments from the Hon'ble High Courts and the Supreme Court, which interpreted the term "entertain" to mean "to give judicial consideration" or "to admit a thing for consideration."

The appellant referred to Section 35B of the Central Excise Act, 1944, arguing that the Tribunal does not have the discretion to refuse to admit an appeal solely for the non-deposit of 7.5% as provided under Section 35F. The appellant further relied on dictionary meanings and judicial interpretations of the term "entertain" to argue that the pre-deposit is not mandatory at the time of filing the appeal but can be made any time before the appeal is considered on merits.

2. The timing of the mandatory pre-deposit for the appeal to be entertained by the Tribunal:

On the other hand, the respondent, represented by the Ld. Addl. Commissioner (A.R.), contended that the pre-deposit of 7.5% is a mandatory requirement at the time of filing the appeal, as per Section 35F. The respondent supported this argument by referring to Circular F. No. 15/CESTAT/General/2013-14 dated 14/10/2014 and CBEC Circular 984/A/2014-CX dated 16/9/2014, which clarified that the deposit must be made at the time of filing the appeal. The respondent also highlighted Clause 98 of the Finance Bill 2014, which amended Section 35F to mandate the pre-deposit before filing the appeal.

The Tribunal carefully considered the submissions from both sides and analyzed the statutory provisions and judicial precedents. The Tribunal noted that the amended Section 35F explicitly states that the Tribunal shall not entertain any appeal unless the appellant has deposited 7.5% of the duty amount. The Tribunal emphasized that in its procedural context, the appeal is considered "entertained" the moment it is filed and registered, without any separate motion hearing for admission. Therefore, the mandatory pre-deposit must be complied with at the time of filing the appeal.

The Tribunal also reviewed the old Section 35F and the objective of the amendment, which aimed to reduce the burden on appellants by requiring only a 7.5% or 10% pre-deposit instead of the entire adjudged amount. The Tribunal concluded that the legislative intent and objective of the amended provision clearly indicate that the pre-deposit is a prerequisite for filing the appeal.

Conclusion:

In conclusion, the Tribunal held that as per Section 35F of the Central Excise Act, 1944, and Section 129E of the Customs Act, 1962, the appellant is required to deposit 7.5% of the duty amount before filing the appeal and furnish proof of such payment along with the appeal. The Tribunal directed the appellant to deposit the required amount within four weeks and scheduled a compliance hearing. The judgment emphasizes the mandatory nature of the pre-deposit requirement for the appeal to be entertained by the Tribunal.

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