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2025 (3) TMI 7 - HC - Central ExciseDismissal of appeal due to non-compliance of the pre-deposit condition mandated under Section 35F of the Central Excise Act 1944 - HELD THAT - There is no dispute about the fact that 7.5% was initially deposited before the Commissioner (Appeals) at that time when the integrated portal did not exist. Thereafter while approaching the CESTAT the remaining 2.5%has been deposited by the Petitioner. Thus in effect the entire 10% which is the pre-deposit amount stood deposited. The appeal could not have been rejected merely on the ground that it was deposited on a wrong account especially when the said integrated portal was not even available for the Petitioner at the time of the initial deposit. Following the decision of the Bombay High Court in Sodexo India Services Pvt. Ltd. vs. Union of India 2022 (10) TMI 264 - BOMBAY HIGH COURT this Court is therefore inclined to direct that the appeal would now be heard by CESTAT on merits without any further deposit being insisted upon. The deposit already made shall be treated as satisfaction of the pre-deposit condition. Conclusion - The appeal would be heard by CESTAT on merits without any further deposit being insisted upon. The deposit already made was deemed sufficient to satisfy the pre-deposit condition. The order dated 08th November 2024 passed by CESTAT is set aside - petition allowed.
The present case involves a writ petition filed by M/s DD Interiors challenging an order by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) due to non-compliance with the pre-deposit condition under Section 35F of the Central Excise Act, 1944. The key issue revolves around the validity of the pre-deposit made by the Petitioner and whether the appeal should be considered on merits despite the alleged improper deposit.**Issues Presented and Considered:**1. Whether the pre-deposit made by the Petitioner was valid and compliant with the legal requirements.2. Whether the appeal should be heard on its merits despite the alleged improper deposit.3. The applicability of the recent GST regime and its impact on the pre-deposit process.**Issue-Wise Detailed Analysis:****Relevant Legal Framework and Precedents:**The Petitioner argued that the confusion regarding the pre-deposit stemmed from the lack of clarity in the legal provisions for accepting payments under Section 35F of the Central Excise Act, 1944. The Petitioner relied on a Bombay High Court judgment in Sodexo India Services Pvt. Ltd. vs. Union of India, where the court allowed the appeal to be heard on merits despite a similar issue of improper pre-deposit. Additionally, a CESTAT Allahabad decision in M/s Shri Krishna Road Carrier vs Commissioner of Central Excise & CGST supported the notion that non-hearing on merits due to pre-deposit irregularities amounted to a denial of substantial justice.**Court's Interpretation and Reasoning:**The Court noted the Petitioner's argument that the pre-deposit was made when the integrated portal was not fully functional, leading to confusion and the deposit being made in the wrong account. The Court emphasized that a mere deposit in the wrong account, especially when the integrated portal was not fully operational, should not result in the rejection of the appeal on procedural grounds. The Court found merit in allowing the appeal to be heard on its merits without further insistence on additional deposits.**Key Evidence and Findings:**The Petitioner had deposited 7.5% of the disputed amount before the Commissioner (Appeals) when the integrated portal was not available. Subsequently, the remaining 2.5% was deposited when approaching CESTAT, totaling the required 10% pre-deposit amount.**Application of Law to Facts:**The Court applied the principles established in the Bombay High Court and CESTAT Allahabad cases, emphasizing the importance of ensuring substantial justice and considering the circumstances under which the pre-deposit was made. The Court concluded that the appeal should be heard on its merits without requiring any further deposits.**Treatment of Competing Arguments:**The Respondents argued that the new payment system was not available when the initial deposit was made, and the Petitioner followed the process allowed at that time. However, the Court found that the lack of availability of the integrated portal at the time of the deposit justified the Petitioner's actions.**Significant Holdings:**The Court held that the appeal would be heard by CESTAT on merits without any further deposit being insisted upon. The deposit already made was deemed sufficient to satisfy the pre-deposit condition. The order of CESTAT returning the appeal was set aside, and the Petitioner was permitted to re-present the appeal within 30 days for a hearing on merits.In conclusion, the Court allowed the writ petition, set aside the CESTAT's order, and directed that the appeal be heard on its merits without any additional pre-deposit requirements. The decision was based on the principles of substantial justice and the unique circumstances surrounding the pre-deposit made by the Petitioner.
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