2015 (6) TMI 405 - AT - Central Excise

Maintainability of appeal - Mandatory pre deposit - Held that - Pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to Section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. Legislature has by implication made retrospective amendment. The learned counsel has also quoted the judgment of the Hon ble High Court of Bombay in the case of Godrej Industries Ltd.(2014 (10) TMI 447 - BOMBAY HIGH COURT) dated 7th October 2014. We have gone through the said judgment. The facts of the case are entirely different. It was relating to the interest provisions under Section 11DD and is in respect of a period when there was no provision for interest. The facts in the present case are entirely different and we do not find application of the said case law. - Second proviso to amended Section 35F makes it very clear that the pending stay applications and appeals as on the date of commencement of the Finance (No.2) Act, 2014 will be governed by the old Section 35F and by implication, the substituted Section 35F will be applicable to all the appeals filed after the commencement of the Finance (No.2) Act, 2014. In view of the said position, we do not consider it necessary to go into the point made by the learned AR. - Appeal not maintainable - Decided against assessee.

Issues Involved:
1. Maintainability of appeals under the amended Section 35F of the Central Excise Act, 1944.
2. Applicability of the amended Section 35F to appeals filed after its enactment.
3. Interpretation of the term "substitution" in legislative amendments.
4. Relevance of prior judgments and interim orders in determining the applicability of the amended Section 35F.

Detailed Analysis:

1. Maintainability of Appeals under the Amended Section 35F:
The primary issue was whether the appeals were maintainable under the amended Section 35F of the Central Excise Act, which came into effect on 6th August 2014. The appellants had not deposited the required 7.5% of the duty confirmed, raising questions about the maintainability of their appeals. The Tribunal noted that before the amendment, appellants were required to deposit the entire duty or penalty unless the Tribunal waived this requirement due to undue hardship. The amendment introduced a mandatory deposit of 7.5% for the first stage of appeal and 10% for the second stage, removing the Tribunal's discretion to waive this requirement.

2. Applicability of the Amended Section 35F to Appeals Filed After Its Enactment:
The appellants argued that the amended provisions should not apply because the show cause notice was issued before the amendment, even though the order-in-original was passed after the amendment. The Tribunal, however, emphasized that the second proviso to the amended Section 35F clearly states that the new provisions apply to all appeals filed after the enactment of the Finance (No.2) Act, 2014, regardless of when the show cause notice was issued or the period of dispute. The Tribunal concluded that the amended Section 35F is applicable to all appeals filed after 6th August 2014.

3. Interpretation of the Term "Substitution" in Legislative Amendments:
The Tribunal referred to the judgment of the High Court of Karnataka in the case of CCE & ST, Bangalore vs. Fosroc Chemicals (India) Pvt. Ltd., which analyzed the implications of the term "substitution" in legislative amendments. The Tribunal agreed with the interpretation that when a provision is substituted, it is as if the new provision has been written into the original Act from the date of substitution, effectively replacing the old provision entirely. This supported the view that the amended Section 35F should be treated as if it had always been part of the Act from 6th August 2014.

4. Relevance of Prior Judgments and Interim Orders:
The appellants cited several judgments and interim orders to support their contention that the amended Section 35F should not apply retrospectively. The Tribunal examined these cases, noting that many were interim orders or related to different contexts, such as income tax laws or different statutory provisions. The Tribunal found that the judgments cited by the appellants did not conclusively address the issue at hand and that the Supreme Court's judgment in Hossein Kasam Dada (India) Ltd. supported the view that pre-existing rights of appeal are not destroyed by amendments unless explicitly stated. The Tribunal concluded that the amended Section 35F applies to all appeals filed after its enactment, regardless of when the show cause notice was issued or the period of dispute.

Conclusion:
The Tribunal dismissed the appeals as not maintainable due to the appellants' failure to deposit the required 7.5% of the duty confirmed, as mandated by the amended Section 35F of the Central Excise Act. The miscellaneous applications filed under the old Section 35F were also dismissed as infructuous. The Tribunal's decision emphasized the mandatory nature of the amended provisions and their applicability to all appeals filed after 6th August 2014.

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