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TMI Blog2016 (7) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... DER Mr.A.P.Srinivas, learned Senior Panel Counsel takes notice for the respondent. Heard both. 2. The petitioner has filed this writ petition challenging an Order-in-Original passed by the respondent dated 23.3.2016, in and by which, the respondent confirmed the demand to the extent of ₹ 44,20,799/- being the service tax payable for the assessment years 2007-08 and 2011-12 in terms of the provisions of Section 73(1) of the Finance Act, 1994, apart from demanding interest and imposing penalty. 3. In the affidavit filed in support of the writ petition, the petitioner raised several grounds, touching upon the merits of the order passed by the respondent. 4. However, this Court posed a preliminary question to the learned counsel for the petitioner that as against the impugned order, the petitioner has not exhausted the appeal remedy, which has been provided under the provisions of the Finance Act. 5. In response to such a query, the learned counsel for the petitioner submits that the petitioner does not seek to canvass the merits of the case, but would pray for a direction to the petitioner to approach the Tribunal with a further direction to the Tribunal to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal along with a stay application without making a pre-deposit of 7.5% of the tax amount confirmed against the petitioner. However, such a direction cannot be issued for the simple reason that the said decision of the learned Single Judge of this Court has been reversed in the decision of the Hon'ble Division Bench of this Court in the case of M/s.Dream Castle another (cited supra). 10. However, now the petitioner seeks to take advantage of the observations made by another Hon'ble Division Bench of this Court in the case of Arafaath Travels Pvt. Ltd. (cited supra) and states that when one Hon'ble Division Bench made such an observation, this Court should direct the petitioner to approach the Tribunal with a direction to the Tribunal to take up the stay application. 11. The arguments advanced by the learned counsel for the petitioner do not merit acceptance for the reason that in the case of Arafaath Travels Pvt. Ltd. (cited supra), the Hon'ble Division Bench of this Court took note of the amendment, which was made applicable to appeals filed after 6.8.2014 and that the appeals and the stay applications filed prior to the said date were to be governed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting out in paragraph 4 of its decision that as a first principle of law, the right of appeal is a statutory right and that it is always open to the legislature which confers a remedy of appeal to regulate the same subject to compliance of certain conditions, the Bench took note of the decisions of the Supreme Court to the effect that the right of appeal is neither an absolute right nor an ingredient to natural justice. Since it is only a statutory right, it can always be circumscribed by the condition in the grant. Therefore, the Court upheld the constitutional validity of the Finance Act 2 of 2014. 40. Thereafter, the Allahabad High Court took up for consideration the next question which is exactly identical to the question that is raised in the present case. After taking note of the decision of the Privy Council in Colonial Sugar Refining Co. Ltd., the decision of the Supreme Court in Hoosein Kasam Dada and the decisions of the Supreme Court in Jose Da Costa Vs. Bascora Sadasiva Sinai Narconim [(1976) 2 SCC 917] and Ramesh Singh Vs. Cinta Devi [AIR 1996 SC 1560], the Allahabad High Court held in paragraphs 19 and 20 as follows: '19. Parliament while substituting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supp.) SCC 574] and Vijay Prakash D.Mehta Vs. Collector of Customs [(1988) 4 SCC 402]. 54. Therefore, it is well settled that the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory. 55. Therefore, the question of prime importance that arises is, as to whether a switch-over from a regime where the deposit of the entire duty was mandatory subject however to the discretion granted to the Appellate Authority to waive the whole or any part it, to a regime where a fixed percentage of 7.5% of the demand is made mandatory, can be said to be more onerous or less onerous. This question appears to have been answered in Shyam Kishore Vs. Municipal Corporation of Delhi [(1993) 1 SCC 22], by a three Member Bench of the Supreme Court, though not directly, but indirectly. In paragraph 38 of the decision, the Supreme Court stated as follows: The decisions of the Bombay and Calcutta High Courts earlier referred to (Elora - AIR 1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or not will not even be raised by those who are benefited by it. 14. In the light of the above, I am of the view that the legal position enunciated in the decision in the case of M/s.Dream Castle another (cited supra) is the correct interpretation given to the provision. 15. That apart, the Hon'ble Division Bench of the Delhi High Court also considered the same issue in the case of M/s.Pioneer Corporation (cited supra) and held as follows : 10. Under Section 35F of the CE Act as it stood prior to 6th August 2014, a discretion was available to the CESTAT to consider the financial hardship and accordingly determine the pre-deposit amount. That discretion has been consciously sought to be curtailed and thus an amendment was made to Section 35F of the CE Act requiring making of a pre-deposit of 7.5% in all cases subject to an upper cap of ₹ 10 crores. A direction, therefore to the CESTAT that it should waive the pre-deposit would be contrary to the express legislative intent expressed in the amended Section 35F with effect from 6th August 2014. 11. While the jurisdiction of the High Court under Article 226 of The Constitution to grant relief notwithstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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