1984 (2) TMI 102 - AT - Central Excise

Issues Involved:

1. Whether the appellant is required to deposit the duty demanded or the penalty levied as a condition precedent to the hearing of the appeal under Section 35F of the Central Excises and Salt Act, 1944.
2. The retrospective applicability of the amended provisions of the Central Excises and Salt Act, 1944.
3. The substantive right of appeal and its implications under the amended Act.
4. The interpretation of vested rights in light of judicial precedents.
5. The impact of the amendment on pending proceedings.

Detailed Analysis:

1. Requirement to Deposit Duty or Penalty Under Section 35F:

The main question for consideration was whether the appellant is bound to deposit the duty demanded or the penalty levied as a condition precedent to the hearing of the appeal under Section 35F of the Central Excises and Salt Act, 1944. The Tribunal concluded that the appellant must deposit the duty demanded or the penalty levied as enjoined by Section 35F before the appeal is heard. This decision was based on the clear wording of the amended Act, which the Tribunal found to be intra vires and applicable to the case at hand.

2. Retrospective Applicability of the Amended Provisions:

The Tribunal examined whether the amended provisions of the Central Excises and Salt Act, 1944, introduced by the Finance Act of 1980, apply retrospectively to pending proceedings. The Tribunal noted that the amended Act expressly stated that appeals arising out of proceedings initiated under the old Act would now be subject to the new provisions, thereby making the amendment retrospective. This was supported by several provisions, such as Sections 35B(1)(c), 35B(d), 35B(2), 35E(4), and 35P, which indicated the retrospective application.

3. Substantive Right of Appeal:

The Tribunal addressed the argument that the right of appeal is a substantive right and not merely a matter of procedure. Citing the Supreme Court's decision in "M/s. Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh," the Tribunal acknowledged that a right of appeal is a substantive right that becomes vested when proceedings are first initiated. However, the Tribunal found that the amended Act had expressly taken away the previous right of appeal to the Central Board of Excise and Customs and the Appellate Collector, replacing it with an appeal to the Tribunal, thereby affecting the substantive right of appeal.

4. Interpretation of Vested Rights in Light of Judicial Precedents:

The Tribunal referred to several judicial precedents, including "Garikapati Veeraya v. N. Subbiah Choudhry," which established that a vested right of appeal can only be taken away by express enactment or necessary intendment. The Tribunal found that the amended Act clearly manifested the intention to apply retrospectively to pending proceedings, thereby taking away the vested right of appeal under the old Act.

5. Impact of the Amendment on Pending Proceedings:

The Tribunal concluded that the amended provisions of the Central Excises and Salt Act, 1944, applied to pending proceedings, as the amendment was expressly retrospective. This conclusion was supported by the provisions of the amended Act, which indicated that pending appeals and revisions would now be subject to the new appellate structure and requirements, including the pre-deposit condition under Section 35F.

Dissenting Opinion:

A dissenting opinion was recorded by one of the members, who argued that the requirement of pre-deposit under Section 35F should not apply to first appeals where the proceedings were initiated before the amendment came into force. This view was based on the principle that a vested right of appeal, which includes the right to appeal without the pre-deposit condition, should not be taken away retrospectively unless expressly stated. The dissenting member cited the Supreme Court's decision in the "Hoosein Kasam Dada" case and argued that the old law should continue to apply to support the pre-existing right of appeal.

Order of the Tribunal:

In accordance with the majority decision, the Tribunal held that an appellant must deposit the duty demanded or the penalty levied as required by Section 35F of the Central Excises and Salt Act, 1944, before the appeal is heard. The reference was answered accordingly, and the case was sent back to the concerned Bench for a decision in light of this order.

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