2015 (9) TMI 731 - AT - Service Tax

Waiver of pre deposit - Mandatory pre deposit - Held that - even prior to 6-8-2004 the appellants did not have an unfettered right to appeal inasmuch as that right was fettered to the extent that the appellant was pending appeal required to deposit the duty demanded or penalty levied. In terms of the amended Section 35F the appellant s right to appeal is fettered only to the extent that the appellant is required to deposit seven and a half percent/ten percent of the duty or penalty as the case may be. Thus it can be nobody s case that the amended Section 35F has fettered the appellant s right to appeal to a degree higher than before. - amended Section 35F by requiring the appellant to deposit only 7.5%/10% of duty or penalty as the case may be has in no way prejudiced the appellants right to appeal vis- -vis their right to appeal as it existed prior to 6-8-2014. See in this light the amended Section 35F does not run foul of any of the case laws cited by the appellants even if the appellants interpretation of those case laws is accepted. Indeed CESTAT registry would have had no objection if these appeals were filed with full deposit of full duty or penalty. CESTAT cannot entertain any appeal filed on or after 6-8-2014 without the mandatory pre-deposit as per the provisions of Section 35F as amended w.e.f. 6-8-2014. - Decided against assessee.

Summary

Issues:
Appeal filed without mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 post-amendment - Applicability of pre-deposit requirement to appeals filed after 6-8-2014 - Interpretation of right to appeal pre and post-amendment.

Analysis:
1. The appellants filed appeals post-amendment without the mandatory pre-deposit under Section 35F, arguing that as their show cause notices were issued pre-amendment, they were exempt. They contended that the right of appeal accrues on the date of the show cause notice, and the amended Section deprives them of the right to file an appeal with a waiver application. They cited the second proviso to Section 35F to support their stance, claiming discrimination based on filing date.

2. The appellants relied on case laws to bolster their arguments. However, the Tribunal analyzed Section 35F pre and post-amendment, emphasizing that CESTAT, being a statutory creation, must adhere to the Act's provisions. The Tribunal cited precedents highlighting CESTAT's limited powers and its obligation to comply with the law. The language of the amended Section was deemed clear, leaving no room for interpretation by CESTAT.

3. The Tribunal assessed whether the amendment prejudiced the appellants' right to appeal. It noted that even pre-amendment, the right to appeal required a deposit. The amended Section merely altered the deposit percentage, removing CESTAT's discretion to waive it. The appellants' argument that the amendment curtailed their right was refuted, as the deposit requirement was consistent with pre-amendment conditions. The Tribunal rejected the appellants' contention, ruling that CESTAT cannot entertain appeals without the mandatory pre-deposit post-amendment.

4. The judgment clarified that the amended Section 35F did not unduly restrict the right to appeal, as the deposit requirement was not more onerous than before. The Tribunal emphasized that the amendment did not violate the appellants' right to appeal, as it aligned with the pre-amendment deposit conditions. Consequently, the Tribunal upheld the requirement of mandatory pre-deposit for appeals filed after 6-8-2014, as per the amended Section 35F.

5. In conclusion, the Tribunal dismissed the appellants' arguments and affirmed that CESTAT cannot entertain appeals filed without the mandatory pre-deposit post-amendment. The judgment was pronounced on 26-2-2015.