2019 (1) TMI 913 - AT - Service Tax

Applicability of mandatory provision of pre-deposit - Section 35 F of Central Excise Act - whether the amendment in Section 35F of the Central Excise Act would apply to the impugned appeal? - Held that - The bare perusal of Section 35 of CEA makes it clear the wording is unambiguous. It opens with the words the Tribunal or Commissioner (Appeals) as the case may be, shall not entertain any appeal unless the appellant deposits the percentage of demand a duty as is stipulated in clauses (i), (ii) of (iii) there under. The section further makes it clear that the amended provision would not apply to the appeals and the stay applications already pending before the appellate authority prior to the commencement of the Finance Act No.2 of 2014 dated 6th August, 2014. Thus, it becomes abundantly clear that the amendment for sure will apply to all the appeals filed on or after the said date (06.08.2014) - In the present case, admittedly, the impugned appeal has been filed after the said amendment. The lis for the purpose of Section 35 F begins with the filing of appeal before CESTAT and the Tribunal has to apply the second proviso to the amended Section 35 F of Central Excise Act. Apparently that appeal has been filed after 6th August, 2014. Resultantly, the amended section 35 F shall be applicable to the impugned lis - application disposed off.

Summary

Issues:
1. Application under Section 86 (6 A) of the Finance Act objecting to defects pointed out by central registry.
2. Interpretation of Section 35F of the Central Excise Act regarding pre-deposit requirement for entertaining appeals.

Analysis:
1. The appellant filed an appeal against a Commissioner's order confirming a demand. The central registry objected to the appeal due to non-payment of the mandatory 7.5% pre-deposit. The appellant argued that the pre-deposit requirement should not apply as the proceedings began before the amendment imposing this condition. They cited legal precedents to support their position. The Department contended that the statutory amendment mandating pre-deposit must be followed for appeals filed post-amendment. They referred to relevant High Court decisions. The Tribunal considered the arguments and focused on whether the amendment in Section 35F would apply to the appeal.

2. The Tribunal analyzed Section 35F, which clearly states that appeals filed after the amendment date (06.08.2014) must comply with the pre-deposit requirement. The Tribunal noted that the amendment does not apply to appeals pending before the commencement of the Finance Act No.2 of 2014. The Tribunal emphasized that the amendment would apply to appeals filed after the specified date. The Tribunal also considered the applicant's argument regarding the commencement of the lis before the amendment date, citing legal interpretations. However, the Tribunal concluded that the lis for Section 35F begins with the appeal filing date, making the amendment applicable to the present case.

3. The Tribunal referenced various High Court decisions to support its interpretation of the applicability of the amendment in Section 35F. The Tribunal found that the second proviso to the amended Section 35F of the Central Excise Act must be applied, especially since the appeal was filed post-amendment. Consequently, the Tribunal upheld the central registry's objections and directed the appellant to deposit 7.5% of the demand confirmed within two months for further proceedings on the appeal.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the interpretation of the relevant legal provisions and precedents cited during the proceedings.