2025 (3) TMI 6 - HC - Central Excise

Dismissal of appeal due to non-compliance with the pre-deposit condition under Section 35F of the Central Excise Act 1944 - HELD THAT - Admittedly the pre-deposit was made by the Appellant way back on 13th August 2018 and 17th August 2018 itself for a sum of Rs. 1, 60, 600/- and Rs. 4, 750/- respectively. The Petitioner has also submitted the challans showing the deposit. The ground taken in the impugned order is that the same was deposited in a wrong account and therefore credit cannot be given of the pre-deposit and hence the appeal does not deserve consideration on merits. A mere deposit in the wrong account that too when the integrated portal might not have been fully functional or the existence of the same was not within the knowledge of the Petitioner cannot result in a rejection of the appeal on the ground of defects. The matter in the opinion of this Court deserves consideration on merits by the CESTAT. Let a competent official from the Respondent-Department be present on the next date of hearing with the instructions - List on 21st February 2025.

Summary

The High Court considered a writ petition challenging an order by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that returned an appeal due to non-compliance with the pre-deposit condition under Section 35F of the Central Excise Act, 1944. The petitioner, M/s DD Interiors, had made the pre-deposit but it was claimed to have been deposited in the wrong account. The petitioner argued that the confusion arose due to the introduction of the Goods and Services Tax (GST) regime and cited a Bombay High Court judgment in a similar case where the appeal was allowed to be heard on merits despite a similar issue with the pre-deposit.The Court noted the uncertainty and confusion surrounding the GST regime at the time of payment and the lack of clarity on the correct procedure for making pre-deposits. The petitioner relied on Ministry of Finance instructions and the Bombay High Court judgment to support their argument that the appeal should not be rejected solely on the ground of a technical defect in the pre-deposit.The Court emphasized that a mere deposit in the wrong account, especially when the integrated portal may not have been fully functional or known to the petitioner, should not lead to the rejection of the appeal on procedural grounds. The Court opined that the matter deserved consideration on its merits by the CESTAT.The Respondents were directed to provide information on when the integrated portal became operational and was publicly communicated to the assesses. The Court ordered that no coercive steps should be taken against the Petitioner in the meantime and instructed a competent official from the Respondent-Department to be present at the next hearing with instructions. The order was to be sent to the Respondent-Department for compliance, and the case was listed for further hearing on 21st February, 2025.The Court's decision focused on the importance of considering the merits of the case rather than rejecting the appeal based on technicalities related to the pre-deposit process. The judgment highlighted the need for clarity and guidance in the implementation of new tax regimes like GST to avoid confusion and ensure fair treatment for taxpayers.