2016 (3) TMI 487 - HC - Service Tax

Applicability of Section 35F of the Central Excise Act, 1944 - Waiver of pre-deposit - Appeals pending on the date of amendment before CESTAT - Held that - in the absence of any saving clause qua the provision as it stood prior to the amendment, there is as of date no provision in the CE Act which mandates pre-deposit in appeals pending before the CESTAT prior to 6th August 2014, the Appellant has a statable case on the strength of the decision of the Constitution Bench of the Supreme Court in Kolhapur Canesugar Works Ltd. Vs. UOI, 2000 (2) TMI 823 - Supreme Court of India . - Decided in favour of appellant

Summary

Issues involved:
1. Applicability of Section 35F of the Central Excise Act, 1944 to pending appeals before the CESTAT.
2. Interpretation of the amendment to Section 35F of the CE Act made by the Finance Act, 2014.
3. Whether the CESTAT could direct the Appellant to make a pre-deposit under the earlier version of section 35F of Central Excise Act 1944.

Analysis:
1. The judgment concerns an appeal against an order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) requiring the Appellant to make a pre-deposit of a specified amount within a set period, failing which the appeals would be dismissed. The issue raised involves the applicability of Section 35F of the Central Excise Act, 1944 to pending appeals before the CESTAT.

2. The amendment to Section 35F of the CE Act by the Finance Act, 2014 is crucial. The second proviso of the amendment clarified that Section 35F would not apply to appeals pending before the CESTAT on the date of the amendment. The Appellant's appeals were filed before the amendment, along with applications for waiver of pre-deposit. The substitution of Section 35F with a new provision mandating pre-deposit came into effect after the appeals were filed.

3. The absence of a saving clause in the amended provision raised a significant legal question. Citing the decision of the Constitution Bench of the Supreme Court in a specific case, the Court found that the Appellant had a prima facie case regarding the lack of a provision mandating pre-deposit in appeals pending before the CESTAT prior to the amendment. The Court framed a question of law for determination regarding the CESTAT's authority to direct pre-deposit under the earlier version of Section 35F.

4. The judgment admitted the appeal and allowed the parties to submit additional documents within a specified period. The Court scheduled a hearing for further proceedings. Notably, the Court stayed the impugned order by the CESTAT, directing that the appeals proceed without insisting on pre-deposit by the Appellant. This decision was crucial in providing relief to the Appellant pending the final determination of the legal question at hand.