2021 (12) TMI 674 - HC - Central Excise

Maintainability of appeal - pre-deposit under Section 35-F of the Act - appellant submitted that Section 35F of the Act is introduced with effect from 6.8.2014 and that the show cause notice issued to the appellant was much before the said amendment and hence, the amendment under Section 35-F of the Act, being perspective in nature is not applicable to this case and the disposal of the appeal relying on the pre-deposit is illegal and wrong - HELD THAT - On going through the order of the CESTAT, it is seen that the appeal was disposed of directing the appellant to make the pre-deposit as provided under Section 35-F of the Act before the Commissioner (Appeals) and if the appellant makes the pre-deposit, the Commissioner (Appeals) was directed to decide the appeal on merits. In fact, the order of the CESTAT does not foreclose the appellant's case, but he is given an option to make the pre-deposit before the 1st appellate authority and if the deposit is made, the first appellate authority shall direct to consider the appellant's case on merits. We fully agree with the order of the CESTAT as it is a mandatory provision that the appellant has to make the pre-deposit as per Section 35F of the Act and only in that case, the appeal need be entertained - the order of the CESTAT is confirmed. Appeal disposed off.

Summary

Issues:
Challenge to order of CESTAT regarding pre-deposit under Section 35-F of the Central Excise Act, 1944.

Analysis:
The appellant, a Co-operative society, challenged the order of the Additional Commissioner of Central Excise, Customs, and Service Tax imposing service tax and penalty. The Commissioner (Appeals) dismissed the challenge due to non-compliance with Section 35-F of the Act. The appellant then approached the CESTAT, which directed a pre-deposit under Section 35-F before considering the appeal on merits. The appellant contended that the amendment to Section 35-F was not applicable retrospectively. However, the Act clearly mandates a pre-deposit to entertain any appeal.

The High Court referred to a judgment by the High Court of Allahabad, which upheld the applicability of Section 35-F even if the show cause notice was issued before the amendment. The Court agreed with this view, emphasizing the mandatory nature of the pre-deposit requirement under Section 35-F. The Court noted that the CESTAT's order did not close the appellant's case but provided an opportunity to comply with the pre-deposit requirement. Consequently, the Court confirmed the CESTAT's order, granting the appellant three months to make the pre-deposit. If the deposit is made, the Commissioner (Appeals) is directed to decide the appeal on merits within six months from the date of the judgment.

In conclusion, the High Court upheld the CESTAT's order directing the pre-deposit under Section 35-F of the Act, emphasizing the mandatory nature of this requirement for entertaining appeals. The Court granted the appellant a limited period to comply with the pre-deposit condition, ensuring a subsequent decision on the appeal's merits by the Commissioner (Appeals).