2019 (1) TMI 664 - HC - Central Excise

Maintainability of appeal - non-compliance with the requirement of pre-deposit - Section 35F of the Central Excise Act, 1944 - Held that - The challenge to the vires of the amended provision becomes academic and it is no longer necessary to assess the propriety of the orders impugned, both in the regular appeals and in the writ petitions, by which the Appellate Tribunal dismissed the appeals without going into the merits thereof - The order of adjudication of July 11, 2014 pertaining to AI Champdany Industries Limited, the order dated October 14, 2014 pertaining to RDB Textiles Ltd. and order dated March 17, 2015 pertaining to Mahadeo Jute & Industries Limited, all passed by the adjudicating authority, will stand set aside.

Summary

Issues:
Appeal competency without statutory pre-deposit under Section 35F of the Central Excise Act, 1944; Challenge to the amendment and vires of the amended provision; Benefit entitlement based on Supreme Court judgment; Dismissal of appeals by the Appellate Tribunal without considering merits; Set aside of adjudication orders by the adjudicating authority.

Analysis:
The judgment by the High Court of Calcutta involved three appeals and connected writ petitions stemming from individual orders by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Appellate Tribunal found the appeals in question to be incompetent due to the lack of statutory pre-deposit as required by the amendment to Section 35F of the Central Excise Act, 1944. The appeals in question were CEXA 4 of 2015, CEXA 13 of 2015, and CEXA 5 of 2016. Additionally, the assessees had filed writ petitions challenging the orders of incompetence and questioning the amendment's propriety and validity. These matters were referred to a Division Bench alongside the pending appeals.

The legal issue at hand was settled by a Supreme Court judgment (2018 (359) E.L.T. 433) in favor of the assesses, where it was determined that the requirement of indicating a brand name on bags for customers did not disqualify the assesses from claiming exemptions they were entitled to. The Central Excise authorities acknowledged this judgment and agreed to extend the benefit to similarly situated assesses, including those involved in the present cases. Consequently, the challenge to the amendment's vires became moot, and there was no need to assess the impugned orders that dismissed the appeals without delving into their merits.

As a result of the Supreme Court's ruling, the appeals and writ petitions were disposed of, granting the assesses the benefits outlined in the Supreme Court judgment. The branding requirement, as per the specific circumstances of these cases, did not negate the assesses' entitlement to exemptions. Therefore, the orders of adjudication passed by the adjudicating authority were set aside, specifically the orders dated July 11, 2014, October 14, 2014, and March 17, 2015, pertaining to different jute manufacturing entities. The judgment concluded without any direction regarding costs, signifying the resolution of the issues at hand.