2022 (12) TMI 771 - HC - Central Excise

Maintainability of appeal - requirement of pre-deposit - Section 35 F of the Central Excise Act, 1944 - HELD THAT - The appellant cannot be denied of being heard on merits in an appeal as more than 7.5% of the amount required for pre-deposit has been recovered by the Department from the petitioner's clients. The amount has to be treated as pre-deposit for the purpose of Section 35 F of the Central Excise Act, 1944 as made applicable to appeals against order passed under the Finance Act, 1994. Hence, the appeals are allowed. No costs.

Summary

Issues:
1. Appeal against Defect Misc. Order Nos. 40003 & 40004 of 2020 passed by Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench.
2. Pre-deposit requirement for filing appeals.
3. Applicability of Section 35F of Central Excise Act, 1944.
4. Admissibility of appeals based on recovered amount.
5. Interpretation of pre-deposit conditions under SVLDRS, 2019.
6. Rights of the appellant in appeal process.

Analysis:
1. The appellant filed appeals against Defect Misc. Orders passed by the Customs, Excise, and Service Tax Appellate Tribunal, seeking to admit the appeals treating a specific amount as pre-deposit and requesting final orders on merits within a specified timeline.

2. The appellant, a Public Charitable Trust, faced a pre-deposit requirement for filing appeals related to disputes over lands leased for mining activities. The appellant highlighted its compliance with tax obligations and its participation in the Sabka Vishwas (Legacy Dispute Resolution) Scheme, emphasizing financial constraints in meeting the pre-deposit demand.

3. The issue revolved around the interpretation of Section 35F of the Central Excise Act, 1944, concerning the pre-deposit conditions for appeal filings. The appellant argued against being asked for additional pre-deposit beyond the recovered amount, asserting the right to appeal despite the Department's recovery actions.

4. The respondent contended that the appellant's delayed payments under previous disclosure schemes did not absolve it from the mandatory pre-deposit requirement for appeals. The respondent emphasized that the recovery made by the Department did not eliminate the necessity of complying with pre-deposit conditions.

5. The Court, after considering arguments from both sides, ruled in favor of the appellant, stating that the recovered amount should be treated as pre-deposit under Section 35F, allowing the appeals to proceed. The Court emphasized the appellant's right to be heard on merits, especially when more than 7.5% of the required pre-deposit had been recovered by the Department.

6. Consequently, the Court directed the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) to number and expedite the appeals for final disposal, emphasizing the need for a timely resolution while acknowledging the challenges posed by reduced sittings. The judgment upheld the appellant's right to appeal and be heard on the merits of the case, ensuring a fair legal process despite financial constraints.