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2022 (11) TMI 400 - AT - Central ExciseMaintainability of petition - requirement of deposit of mandatory amount under Section 35F of Central Excise Act, 1944 as made applicable to Service Tax matters by Section 83 of the Finance Act - HELD THAT - It would be seen from a bare perusal of section 35F of the Customs Act that after August 06, 2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 35F on August 06, 2014 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue. The Supreme Court in NARAYAN CHANDRA GHOSH VERSUS UCO BANK 2011 (3) TMI 1478 - SUPREME COURT , examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statue confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. A Division Bench of Delhi High Court in M/S. VISH WIND INFRASTRUCTURE LLP, M/S. J.N. INVESTMENT TRADING CO. PVT. LTD. VERSUS ADDITIONAL DIRECTOR GENERAL (ADJUDICATION) , NEW DELHI 2019 (8) TMI 1809 - DELHI HIGH COURT examined the provisions of section 35F of the Central Excise Act, 1944 which are pari materia to section 129E of the Customs Act and held that every appeal filed before the Tribunal after the amendment made in section 35F of the Excise Act and section 129E of the Customs Act on 06.08.2014 would be maintainable only if the mandatory pre-deposit was made. The appellant has not made the pre-deposit - the application for waiver of pre-deposit is accordingly, rejected.
Issues Involved:
1. Defects in the appeal filing process. 2. Requirement of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944. 3. Application for waiver of pre-deposit due to financial constraints. 4. Legal precedents regarding mandatory pre-deposit and the power to waive it. Detailed Analysis: 1. Defects in the appeal filing process: The appeal was filed on 10.06.2022 with ten defects identified by the office. The appellant was informed of these defects via a letter sent by speed post on 01.07.2022, which was delivered on 19.07.2022. Despite being granted additional time on 10.08.2022 to rectify these defects, neither the defects were removed nor did anyone appear to press the appeal on subsequent dates. 2. Requirement of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944: One of the defects pointed out was the non-deposit of the mandatory amount under Section 35F of the Central Excise Act, 1944, applicable to Service Tax matters via Section 83 of the Finance Act, 1994. Section 35F mandates a pre-deposit of a certain percentage of the duty demanded or penalty imposed before filing an appeal. The Tribunal cannot entertain any appeal unless this pre-deposit is made, as specified in sub-sections (i), (ii), and (iii) of Section 35F. 3. Application for waiver of pre-deposit due to financial constraints: The appellant filed a miscellaneous application seeking a waiver of the pre-deposit, citing financial difficulties. However, post the amendment on August 06, 2014, neither the Tribunal nor the Commissioner (Appeals) has the power to waive the requirement of pre-deposit. This was a significant departure from the earlier regime where the Tribunal could waive the pre-deposit if it caused undue hardship. 4. Legal precedents regarding mandatory pre-deposit and the power to waive it: The Supreme Court in Narayan Chandra Ghosh vs. UCO Bank and Others emphasized that statutory conditions for appeals, such as pre-deposits, are mandatory. The Court held that the Appellate Tribunal erred in law by entertaining appeals without the mandatory pre-deposit. This principle was reiterated in Kotak Mahindra Bank Pvt. Limited vs. Ambuj A.Kasiwal & Ors, and in Chandra Sekhar Jha, where the Supreme Court noted the legislative intention to not allow discretionary power for waiving pre-deposits under the new regime. The Delhi High Court in Dish TV India Limited vs. Union of India & Ors. and M/s Vish Wind Infrastructure LLP vs. Additional Director General (Adjudication) also upheld that the mandatory pre-deposit requirement cannot be waived by the courts. The Madhya Pradesh High Court in Ankit Mehta vs. Commissioner, CGST Indore dismissed a writ petition for waiver of pre-deposit due to financial constraints, reinforcing that neither the Tribunal nor the courts have the power to waive or reduce the mandatory pre-deposit. Conclusion: The appellant's application for waiver of the pre-deposit was rejected based on the statutory provisions and judicial precedents. The Tribunal granted the appellant six weeks to make the pre-deposit, failing which the appeal would not be entertained. The appeal was scheduled for listing on 15.11.2022, with intimation to be sent to the appellant by speed post.
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