2016 (8) TMI 125 - HC - Central Excise

Waiver of pre-deposit - Constitutional validity of amendment made in Section 35F of the Central Excise Act, 1944 - retrospective or prospective - Held that - so far as question pertaining to Constitutional validity of the amendment and its retrospective effect or prospective effect are concerned, since such questions are not examined by us, liberty can be reserved to raise such issues at a later stage, in the event the appellants are unsatisfied with the decision of the Tribunal. We find that we need not address on the said aspects, except giving liberty to the appellants to agitate such questions as and when such controversies arise. The appeal filed by the appellants No. 1 and 2 shall be examined on merits by the Tribunal, after the deposit of the amount of ₹ 45 lakhs by the appellant Company and such amount shall be deposited by the appellant No.1 Company, within three weeks from today. The Tribunal shall decide the said appeal as early as possible, preferably within three months from the date of receipt of copy of this order.

Summary

Issues:
Constitutional validity of amendment in Section 35F of the Central Excise Act, 1944 and validity of related circulars.

Analysis:
The judgment pertains to appeals against a previous order upholding the Constitutional validity of an amendment in Section 35F of the Central Excise Act, 1944, and the validity of associated circulars. The appellants argued that as there is an alternative forum of appeal available, the matter should be pursued before the Tribunal. They challenged the amendment, which made it mandatory to deposit 7.5% for appeal consideration, claiming it was retrospective for pending appeals. One of the appellants was willing to deposit the required amount, seeking to dispense with the recovery. The respondents contended that the Court could modulate relief under Article 226 if the appellants intended to pursue the appeal before the Tribunal. The penalty amounts imposed on the company and its officer were specified, with 7.5% deposit requirements discussed. The Court decided that the company should deposit ?45 lakhs for appeal consideration, while the officer's deposit could await the appeal's final disposal to assess individual liability.

The Court reserved the right to raise questions regarding the Constitutional validity of the amendment and its retrospective effect later if needed. The judgment directed the appellants to deposit the specified amounts within three weeks for the Tribunal to review the appeal on its merits promptly. The Court emphasized that the issue of the amendment's validity could be revisited before a Division Bench if the appellants were dissatisfied with the Tribunal's decision. The judgment concluded by disposing of the appeals in line with the specified orders, with no costs awarded.