2014 (5) TMI 24 - HC - Central Excise

Alternative remedy - whether Section 35(1)(b) of the Central Excise Act, 1944 (hereinafter referred to as the Act ) confers an alternative remedy of appeal, against an order passed by the Commissioner (Appeals), under Section 35F of the Act. - Held that - An assessee aggrieved by an order, passed by an Assessing authority, may file an appeal under Section 35 of the Act. Section 35A of the Act enumerates the procedure for filing and deciding an appeal. The power to entertain and decide an appeal and as a consequence to pass final and interim orders flows from Section 35 and Section 35A of the Act. Section 35F of the Act, which requires an assessee to pre-deposit the amount demanded by the revenue and empowers the Commissioner (Appeals) to waive the amount so demanded, is integral to the scheme of appellate powers conferred by Section 35 and Section 35A of the Act. Section 35F of the Act commences with the words, ... where in any appeal under this Chapter ... thereby leaving no ambiguity that power under Section 35F can only be exercised when an appeal has already been filed under Chapter VIA. Section 35F of the Act thus can only be invoked if an appeal has already been filed. We, therefore, hold that an order passed by the Commissioner (Appeals) exercising power under Section 35F, is an order passed in an appeal filed under Section 35 read with Section 35A of the Act and shall be appealable to the CESTAT as an order appealable under Section 35B(1)(b) of the Act. A perusal of the judgment in Hindustan Lever Ltd. s case (supra) reveals that significance of the opening words of, namely, ... where in any appeal under this Chapter ... were not noticed or considered. Petitioners are relegated to their alternative remedy of filing an appeal before the CESTAT. In case such appeal is filed within two months from today, the delay, if any, on account of pendency of this writ petition shall be considered sympathetically.

Summary

Issues:
Interpretation of Section 35(1)(b) of the Central Excise Act, 1944 regarding appealability of orders passed under Section 35F.

Analysis:
The primary issue in this case revolves around the interpretation of Section 35(1)(b) of the Central Excise Act, 1944, specifically concerning the appealability of orders passed under Section 35F. The petitioner argues that orders under Section 35F are not appealable, citing a judgment by the Madras High Court. On the other hand, the respondents contend that orders under the first proviso to Section 35F are appealable to the CESTAT, as they are passed by an Appellate Authority in the exercise of its appellate powers. The crux of the matter lies in determining whether an order under Section 35F is considered part of the appellate process under the Act.

The court carefully analyzed the provisions of Sections 35, 35A, and 35F of the Act to decipher the legislative intent behind these sections. It was observed that Section 35F, which mandates pre-deposit of demanded amounts, is an integral part of the appellate powers conferred by Sections 35 and 35A. The court emphasized that Section 35F explicitly states that its provisions apply to appeals under the relevant chapter, leaving no room for ambiguity. Therefore, the court concluded that orders passed under Section 35F are indeed appealable, as they are considered part of the appellate process outlined in the Act.

In light of the above analysis, the court held that orders passed by the Commissioner (Appeals) under Section 35F are appealable to the CESTAT under Section 35B(1)(b) of the Act. The court also expressed disagreement with a previous judgment that failed to consider the crucial opening words of Section 35F, emphasizing the necessity of filing an appeal before invoking the provisions of Section 35F. Consequently, the petitioners were directed to pursue their remedy by filing an appeal before the CESTAT within a specified timeframe, with any delays due to the writ petition being considered sympathetically.

In conclusion, the judgment clarifies the appealability of orders passed under Section 35F of the Central Excise Act, highlighting the interplay between various sections of the Act and underscoring the procedural requirements for invoking appellate powers in such cases.