2018 (9) TMI 1269 - HC - Central Excise

Non-Compliance of Pre-deposit - time limitation - appeal dismissed on the reason that the required pre-deposit was made belatedly after a period of 7 months from the date of filing of the appeal - Section 35F of the Central Excise Act, 1944. Whether the appeal presented within time can be rejected on the ground that pre-deposit was made belatedly? Held that - The issue has already been considered by the Division Bench of this Court in MR. RAMKI VERSUS THE ADDITIONAL COMMISSIONER OF CUSTOMS (PAU) , THE COMMISSIONER OF CUSTOMS (APPEALS I) 2017 (7) TMI 832 - MADRAS HIGH COURT , wherein the Division Bench after taking note of various decisions, including the Full Bench decision relied on by the respondents, held that The proviso to Section 128 (1) of the 1962 Act, empowers the second respondent to adjudicate upon an appeal filed beyond the period of 60 days, but, within a further period of 30 days, provided sufficient cause is shown for the delay in presenting the appeal. Section 129 E (i) on the other hand, provides that the second respondent shall not entertain any appeal under sub-section (1) of Section 128, unless the appellant has deposited 7.5% of the duty demanded or penalty imposed or both, in pursuance of a decision or an order passed by an Officer of Customs, lower than the rank of Commissioner of Customs. Since the Division Bench has also taken into consideration of the Full Bench decision relied on by the respondents and has come to the above conclusion that the Appellate Authority could not have dismissed the appeal on the ground that the prescribed mandatory appeal was made beyond the condonable period, this Court, bound by the above decision of the Division Bench, cannot take a different view. The matter is remitted back to the second respondent to take up the appeal and pass orders on the same on merits - appeal allowed by remand.

Summary

Issues:
Appeal dismissed for non-compliance of pre-deposit under Section 35F of the Central Excise Act, 1944.

Analysis:
The petitioner, an Assessee registered with the Service Tax Commissionerate for renting immovable property, challenged an order confirming service tax demand, interest, and penalty. The appeal was rejected by the First Appellate Authority due to a belated pre-deposit made 7 months after filing the appeal. The petitioner argued that the appeal was presented on time, relying on a Division Bench decision. Respondents cited a Full Bench decision. The Court considered whether an appeal presented on time can be rejected for a late pre-deposit, referencing the Division Bench's observations. The Court highlighted the importance of presenting the appeal within the prescribed period, not solely based on pre-deposit timing.

The Court discussed the Circular's applicability, emphasizing the need for evidence of pre-deposit. It differentiated between the appeal process before the second respondent and the Tribunal. The Court addressed the Full Bench judgment's relevance, clarifying its interpretation in the context of the TNGST Act. The Court distinguished the language of Section 129 E from the TNGST Act, emphasizing the mandatory pre-deposit requirement under the 1962 Act. The Court referred to a Supreme Court judgment for further clarity on the consequences of non-compliance with pre-deposit requirements.

The Court concluded that the Second Respondent erred in dismissing the appeals based on the delayed pre-deposit. It upheld the Division Bench's decision and remitted the matter back to the Second Respondent for consideration on merits and in accordance with the law. The Court noted the Revenue's acceptance of the Division Bench decision and directed timely action on the appeal, applying the decision to grant relief to the petitioner. The writ petition was allowed, setting aside the Second Respondent's order, with instructions for timely resolution of the appeal and the cross appeal filed by the Revenue.

This detailed analysis of the judgment highlights the Court's considerations regarding the appeal's dismissal for non-compliance with pre-deposit requirements under the Central Excise Act, emphasizing the importance of timely presentation and the application of relevant legal precedents to ensure fair adjudication.