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TMI Blog2016 (9) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... osit 7.5% or 10%, as the case may be, for preferring appeals before the Commissioner (Appeals) or the Tribunal. - Decided against the appellant. - W.P.C.Nos.9991, 10881, 11288, 20393, 20638, 20668, 21346, 21348, 21354 & 22732 of 2016 - - - Dated:- 14-7-2016 - A. M. Shaffique, J. For the Petitioner : Sri Jose Jacob, Amritha Varshini M. For the Respondent : Sri John Varghese JUDGMENT Since these cases concern a common issue, the same are decided by a common judgment. 2. For easy reference, I am referring to the facts in W.P.C.No.9991/2016. The petitioner challenges Ext.P8 order passed by the Customs, Excise Service Tax Appellate Tribunal directing the petitioner to comply with the provisions of Sec.35F of the Central Excise Act (hereinafter referred to as 'the Act'). Petitioner was served with an order dated 31/12/2014 confirming demand of service tax on the amount received by the petitioner from Money Transfer Service. Petitioner challenged the said demand by filing W.P.C.No.4616/2015. By judgment dated 04/03/2015, 3rd respondent was directed to re-consider the matter. On remittance, the matter was heard on 23/04/2015. Ext.P4 was passed on 11/05/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on pre-deposit of 7.5% under Section 35F of the Act. It is contended that the appeal being a continuation of the earlier proceedings which commenced much earlier, the insistence for payment of 7.5% is illegal. In the present case, the Commissioner of Central Excise, Customs Service Tax has passed an order on 29/02/2016, which is challenged by way of filing an appeal as per Ext.P2. 8. The contentions raised are two fold. One is that, Section 35F is prospective in operation and it applies only in respect of proceedings which commenced after 06/08/2014. It is contended that the second proviso which indicates that the provisions of the amended section shall not apply to stay petitions and appeals pending before the appellate authority prior to the commencement of Finance Act, 2014 goes contrary to the main provision. Reliance is placed on the judgment of the Apex Court in Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh and Others [AIR 1953 Supreme Court 221] wherein it is held that the right of appeal is a vested right and such a right accrues to the litigant and exists as on and from the date of the lis commences and that such right is to be governed by the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rest of the career of the lis. The exceptions are when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and when the court to which appeal lay at the commencement of the suit stands abolished. It is further contended that though the above provision is challenged before the Allahabad High Court, the constitutional validity was upheld. Similar challenges were made before Delhi, Karnataka and the Gujarat High Court's and the constitutional validity of Section 35F was upheld by these Courts. 10. The first question to be considered is regarding the constitutional validity of Sec.35F of the Act. Section 35F of the Act was amended as per Finance Act, 2014 with effect from 06/08/2014. Section 35F reads as under: Section 35F-The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal- (i) under sub-section (1) of Section 35, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Hoosein Kasam Dada(supra). 12. In Ganesh Yadav v. Union of India [2015(320) E.L.T 711 (All)], a Division Bench of Allahabad High Court considered the constitutional validity of Sec.35F. After elaborately considering the scope and effect of the above provision, it is held at paragraphs 17 to 22 which reads as under: 17. Thus, the principle of law which emerges is that the right of appeal is a vested right and the right to enter a superior Court or Tribunal accrues to a litigant as on and from the date on which the lis commences although it may actually be exercised when the adverse judgment is pronounced. Such a right is governed by the law which prevails on the date of institution of the suit or proceeding and not by the law that prevails at the date of the decision or on the date of the filing of an appeal. Moreover, the vested right of an appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. 18. Justice G.P. Singh in his treatise on Statutory Interpretation has succinctly elucidated the principles to be applied in determining whether a statute is retrospective or not, in the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to all appeals which would be filed on and from the date of the enforcement of Section 35F of the Act. 20. The intendment of Section 35F of the Act is further clarified by the second proviso which stipulates that the provisions of the section shall not apply to stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No.2) Act 2014. The second proviso is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F(1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after the enforcement of the amended provision on 6 August 2014 shall be governed by the requirement of pre-deposit as stipulated therein. The only category to which the provision will not apply that would be those where the appeals or, as the case may be, stay applications were pendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the demanded duty as stipulated in clauses (i), (ii) or (iii) thereunder. The wording of the second proviso to the amended Section 129E is also unambiguous. It makes it clear that the amended provision would not apply to appeals and stay applications already pending before the appellate authority prior to the commencement of the Finance (No. 2) Act, 2014 , i.e. 6th August 2014. In other words, it would apply to all appeals filed on or after the said date. Therefore, what is to be seen is the date of filing of the appeal. If the appeal is filed on or after 6th August 2014 then the condition stipulated in the amended Section 129E of the Act has to be fulfilled for the appeal to be entertained. 14. A Division Bench of the Gujarat High Court also, in Premier Polyspin Pvt.Ltd v. Union of India [2015-TIOL-1265- HC-AHM-CX] considered the very same issue and held at paragraph 4 as under: It is not disputed by learned counsel for the petitioner that he has filed the appeal after the amendment was made in Section 35F of the Central Excise Act. Therefore, the amended provisions would apply and the appeal of the appellant before the CESTAT would not be maintainable in absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to consider the validity of the notification especially when a cause of action has not arisen so far. As and when an occasion arises for the petitioner to challenge the notification, it shall be open for the petitioner to challenge the same. 19. Right of the petitioners to challenge the notification, as and when occasion arises, is hereby reserved. 20. Yet another contention urged in some of the writ petitions is that in so far as the appeal is governed by Section 85 of the Finance Act, Section 35F of the Act cannot have any application. But, it is clear from Section 83 of the Finance Act itself that all the provisions of the Act shall apply in relation to service tax as they applied in relation to duty of excise. There cannot be two different meanings with reference to the above statutory provisions. When Section 35F of the Act applies to the appeals filed in terms of Section 85 of the Finance Act, necessarily the appellate authority has no jurisdiction to call upon the appellants to make the pre-deposit in terms of Section 35F of the Act as well. 21. Some of the petitioners have also raised various contentions on merits of the case, which I do not want to interfere wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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