2015 (7) TMI 313 - AT - Service Tax

Waiver of pre deposit - Mandatory pre deposit of 7.5% - whether pre-deposit of 7.5% of the impugned service tax liability in terms of Section 35F (as amended w.e.f. 6.8.2014) of the Central Excise Act 1944 read with Section 83 of the Finance Act, 1994 is required to be made while filings appeal against order-in-original dated 29.8.2014 when the Show Cause notice in respect thereof was issued before 6.8.2014 - Held that - petitioner in whose case also the lis commenced in 2013 would not be required to deposit the amount of 7.5% as required pursuant to the 2014 amendment and in that respect, he would have efficacious alternate remedy before the Tribunal. Vide the said judgements, Hon ble Kerala High Court allowed the respective petitioners to file appeal before CESTAT and ordered that the CESTAT shall deal with those appeals in terms of the provisions of Section 35F as they stood prior to 6.8.2014. Thus, Hon ble Kerala High Court in 2015 (3) TMI 634 - KERALA HIGH COURT did not lay down any ratio with regard to the general applicability of the provisions of Section 35F as they stood prior to 6.8.2014 in respect of appeals filed on or after the said date and the said orders in respect of respective petitioners were issued in exercise of its writ jurisdiction in the given circumstances after taking note of a prima facie view of the Andhra Pradesh High Court in that regard. Second proviso to amended Section 35F does not leave any scope for interpretational ambiguity with regard to the appeals filed prior to 6.8.2014. Thus the requirement of mandatory pre-deposit is squarely applicable to all appeals filed on or after 6.8.2014 and the amended Section 35F makes no distinction whether the show cause notices in respect of such appeals were issued prior to, on or after 6.8.2014. CESTAT is a creature of the very Act of which the said Section 35F is part and therefore it cannot go beyond the provisions of the Act which has created it. - appellant is required to make the mandatory pre-deposit in terms of Section 35F of Central Excise Act, 1944 as amended with effect from 6.8.2014 and in the absence of such pre-deposit its appeal shall not be entertained - Decided against assessee.

Summary

Issues Involved:
Whether pre-deposit of 7.5% of the impugned service tax liability is required while filing an appeal against an order-in-original dated before the amendment of Section 35F of the Central Excise Act, 1944.

Analysis:

1. Contentions of the Appellant:
The appellant argued that based on judgments from the Kerala High Court and Punjab & Haryana High Court, mandatory pre-deposit is not required for appeals initiated before the amendment of Section 35F. They cited cases like Muthoot Finance Ltd. Vs. Union of India and M/s A.M. Motors Vs. Union of India where it was held that the appeal should be governed by the provisions existing before the amendment.

2. Contentions of the Respondent:
The respondent, represented by the ld. DR, contended that judgments cited by the appellant do not establish the applicability of the amended Section 35F to appeals filed after the amendment. They referred to the Rajasthan High Court's opinion in RSID Investment Corp. Ltd. Vs. UOI, stating that the amendment should apply even to appeals filed before the effective date to avoid violating Article 14 of the Constitution.

3. Judicial Analysis:
The Tribunal examined the Kerala High Court judgments and noted that they did not provide a general ruling on the applicability of Section 35F pre-amendment to appeals filed post-amendment. The Tribunal also considered the Rajasthan High Court's opinion, emphasizing the importance of the second proviso to the amended Section 35F, which mandates pre-deposit for all appeals filed after 6.8.2014, regardless of when the show cause notices were issued.

4. Legal Provisions:
The Tribunal highlighted the provisions of Section 35F of the Central Excise Act, 1944, effective from 6.8.2014, which clearly outline the requirement of pre-deposit for appeals. The Tribunal emphasized that being a creation of the Act, CESTAT must adhere to the statutory provisions, as established by precedents and legal principles.

5. Final Decision:
In conclusion, the Tribunal ruled that the appellant must comply with the mandatory pre-deposit requirement as per the amended Section 35F, effective from 6.8.2014. Failure to make the pre-deposit would result in the appeal not being entertained, aligning with the statutory provisions and legal precedents discussed during the analysis.