2016 (4) TMI 60 - HC - Central Excise

Non fulfillment of pre-deposit - Held that - We would not permit the petitioner to bye-pass the statutory appellate remedy, particularly when factual and legal aspects arise out of the order-in-original. We relegate the petitioner to statutory appellate remedy before the Tribunal. If such an appeal is filed, the Registry of the Tribunal shall not refuse to accept it only on the ground of non fulfillment of pre-deposit requirement. However, till the pre-deposit requirement is fulfilled or some contrary order is passed by the High Court, such appeal shall not be treated as regularly filed nor shall be heard on merits.

Summary

Issues: Challenge to order-in-original directly before High Court without availing statutory appellate remedy, interpretation of Section 35F of the Central Excise Act regarding pre-deposit requirement, power of High Courts under Article 226 to waive predeposit, reiteration of the importance of following statutory appellate procedure.

Analysis:
The petitioner challenged an order-in-original directly before the High Court without utilizing the statutory appellate remedy available before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The petitioner argued that due to a delay in communication of the order-in-original by the Department, they missed the opportunity to appeal and benefit from the predeposit waiver under the unamended Section 35F of the Central Excise Act. The petitioner highlighted instances where similarly situated assesses were granted complete pre-deposit waiver. However, the Court emphasized the importance of following the statutory appellate procedure and not bypassing it, especially when factual and legal aspects arise from the original order.

The Court acknowledged the petitioner's argument but reiterated that it would not be appropriate to entertain the petition directly without insisting on the petitioner filing an appeal before the specialized Tribunal as provided by the statute. The Court also noted the decision of the High Court of Allahabad regarding the power of High Courts under Article 226 to waive predeposit, but stated that the issue would only arise in relation to an appeal filed before the Tribunal, which the petitioner had not yet done.

Consequently, the Court directed the petitioner to pursue the statutory appellate remedy before the Tribunal. The Court instructed that the Tribunal should not reject the appeal solely based on non-fulfillment of the pre-deposit requirement. However, until the pre-deposit is made or a contrary order is issued by the High Court, the appeal would not be considered regularly filed or heard on merits. The petition was disposed of accordingly, emphasizing the importance of following the prescribed appellate procedure.