2023 (3) TMI 1071 - HC - Central Excise

Maintainability of appeal - appeal dismissed on the ground of non-payment of pre-deposit being 7.5% of the disputed demand duty - HELD THAT - The appeal is a creature of statute. In the present case, the legislature has chosen to grant conditional right of appeal to the assessee. Thus, the assessee could have maintained its appeal only against pre-deposit of 7.5% of disputed demand of duty. In absence of pre-deposit, the Tribunal has not erred in rejecting the appeal of the assessee. Again, these being statutory proceeding of further appeal, it is not open for this Court to exercise its inherent power that otherwise may arise under Article 226 of the Constitution of India to grant any relief contrary to the statutory law - Further, it may be noted, neither challenge to the validity of law may arise in these proceedings nor that challenge appears pending in any proceeding. In the interest of justice, to allow the assessee appellant one opportunity to appeal (on facts), indulgence is granted with consent of learned counsel for the revenue such that subject to the assessee making the pre-deposit (@ 7.5%) within a period of two weeks from today.

Summary

Issues involved:
The issues involved in the judgment are the dismissal of appeals by the Tribunal due to non-payment of pre-deposit, the contention of irreparable injury to the assessee, the mandatory requirement of pre-deposit for statutory appeals under Section 35-G of the Central Excise Act, and the exercise of inherent power by the Court.

Dismissal of Appeals Due to Non-Payment of Pre-Deposit:
The present appeal was filed under Section 35-G of the Central Excise Act to challenge the Tribunal's order dismissing the appeals of the assessee as defective because of non-payment of pre-deposit, which was 7.5% of the disputed demand duty. The assessee argued that all its assets were under attachment, causing irreparable injury, and referred to a previous writ petition dismissed for not being maintainable. The Court noted that the appeal is a creature of statute, and the legislature mandated a pre-deposit condition for maintaining the appeal. Therefore, the Tribunal was justified in rejecting the appeal due to the absence of pre-deposit.

Mandatory Requirement of Pre-Deposit for Statutory Appeals:
The counsel for the revenue contended that the assessee, by filing a statutory appeal under Section 35-G, was obligated to fulfill the requirement of Section 35-F(ii) of the Act, which includes making the pre-deposit. It was emphasized that in the absence of pre-deposit, the Tribunal's dismissal of the appeal was appropriate. The Court agreed that the appeal could only be maintained upon pre-deposit of 7.5% of the disputed demand of duty, as per the statutory provisions.

Exercise of Inherent Power by the Court:
Regarding the exercise of inherent power by the Court under Article 226 of the Constitution of India, it was clarified that in statutory proceedings like these, the Court cannot grant relief contrary to statutory law. The Court highlighted that no substantial question of law arose in the proceedings and that challenges to the validity of the law were not relevant. The decision of a coordinate bench was cited to support the dismissal of the appeal on merits. However, the Court granted the assessee two weeks to make the pre-deposit, and if done, the order of the Tribunal would be set aside, allowing the appeal to be registered as a regular appeal for further consideration.