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2019 (10) TMI 493 - HC - Central ExciseMaintainability of appeal - requirement with the pre-deposit - appellants-writ petitioners had availed their appellate remedy under Section 35B of the Central Excise Act - HELD THAT - The pre-amended Section 35F required the entire duty demanded by the adjudicating authority to be deposited, and conferred powers on the Commissioner (Appeals) or the Tribunal, in terms of the first proviso, to dispense with such deposit, subject to such conditions as it deemed fit to impose to safeguard the interests of Revenue. Instead of requiring the appellant to deposit the entire duty as demanded in the adjudication order and in conferring discretion on the Tribunal, subject to such conditions as it may deem fit to impose with a view to safeguard the interests of the revenue, to waive such a requirement, Parliament thought it fit to substitute Section 35F and prescribe a sum, equivalent to 7 percent of the disputed duty, to be deposited for an appeal to be entertained. Appeal dismissed.
Issues:
1. Jurisdiction of the High Court to waive the requirement of depositing 7 ½ percent of disputed duty for entertaining an appeal under Section 35F of the Central Excise Act. 2. Applicability of a Division Bench judgment of the Delhi High Court in a similar case. 3. Doctrine of stare decisis and binding precedent of judgments from different High Courts. Analysis: Issue 1: Jurisdiction of the High Court to waive the deposit requirement under Section 35F: The appellants sought relief from the High Court against an adjudication order by the Commissioner, CGST, Dehradun, without depositing 7 ½ percent of the disputed duty as mandated by Section 35F of the Central Excise Act. The learned Single Judge dismissed the writ petition, emphasizing the mandatory nature of the deposit requirement. The High Court clarified that the Tribunal cannot entertain an appeal without the deposit, and no discretion is provided to waive this obligation. The High Court highlighted that its powers under Article 226 of the Constitution must align with the law, and it cannot overlook statutory provisions. The Special Appeal challenging the dismissal was subsequently rejected, upholding the importance of complying with the deposit requirement under Section 35F. Issue 2: Applicability of a Division Bench judgment of the Delhi High Court: The appellants' counsel referenced a Delhi High Court Division Bench judgment (Shubh Impex v. Union of India) where the court considered the financial burden on the appellant before mandating a deposit for appeal. The Division Bench in that case expressed concerns over crippling financial implications and the impact on business operations due to the deposit requirement. The appellants argued that the principles from this judgment should apply to their case due to significant financial losses and working capital deficiencies. However, the High Court clarified that judgments from one High Court do not create binding precedents for other High Courts, especially outside their jurisdiction. The High Court emphasized that decisions are authoritative only in the context they are made and do not automatically set precedents for other cases. Issue 3: Doctrine of stare decisis and binding precedent of judgments from different High Courts: The High Court further elaborated on the doctrine of stare decisis, emphasizing that judgments from one High Court do not establish binding precedents for other High Courts. The court reiterated that decisions are authoritative only within their jurisdiction and cannot be extended to other territories. Additionally, the court highlighted that the essence of a decision lies in its ratio, not every observation or logical inference. The High Court concluded that it would be inappropriate to issue directions conflicting with statutory provisions, maintaining that interference in intra-Court appeals is limited unless there is a clear legal error. The Special Appeal was dismissed, underscoring the importance of upholding statutory requirements and legal principles. In conclusion, the High Court's judgment reaffirms the mandatory nature of depositing 7 ½ percent of the disputed duty for entertaining an appeal under Section 35F, while also clarifying the limited applicability of judgments from other High Courts and the doctrine of stare decisis in legal precedents.
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