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TMI Blog2017 (8) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... there are contrary views and difference of opinion between the Members, therefore, the matter be placed before the Hon'ble President to refer the matter to the third member. Matter placed before Hon'ble President. - E/Stay/60137, 60133 & 60135, 60423-60425/2016, E/60073, 60074 & 60075 & 60521-60523/2016 - IO/E/13-18/2017-EX[DB], SO/60566-60571/2017 - Dated:- 20-6-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Present for the Appellant: Shri Manoj K. Singh, Advocate Present for the Respondent: Shri Sourabh Goel, Sr. Standing Counsel, Shri G.M. Sharma, AR Per: Ashok Jindal The applicants have filed the applications for waiver of pre-deposit confirmed by way of impugned orders for entertaining the appeals. As the issue involved in all the stay applications is common, therefore, they are disposed of by this common order. 2. The brief facts of the case are that the applicants are engaged in the export of basmati rice and set up a 100% EOU under LOP dated 24.3.2009 which was amended vide letter dated 12.11.2009. Various show cause notices were issued to the applicants for the period May, 2010 to July, 2014 on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India-2016 (340) ELT 63 (Del) and decision in Anjani Technoplasts Ltd. Vs. CCE - 2015 (326) ELT 472 (Del.). 4. Learned Counsel for the respondent further submits that the decision in the case of Super Threading (I) Pvt. Ltd. Vs. Union of India passed by the Hon'ble Punjab and Haryana High Court in CWP No.7696 of 2015 is not binding precedent. As the order of Hon'ble High Court passed on 24.4.2015 was an interim order and that does not become a binding precedent. It is also pertinent to mention that the said writ petition was ultimately rendered infructuous and no binding judgement was passed by the Hon'ble High Court in the said case. He further submits that the department has strong case for demand of duty, interest and penalty from the appellants. He also submits that the judgement of the Hon'ble Punjab and Haryana High Court dated 23.12.2015 in the case of Punjab State Power Corporation Ltd. Vs. State of Punjab is not applicable to the present case as the said decision has been passed by the Hon'ble High Court under Punjab Vat Act whereas as in this case, section 35F of the Central Excise Act is under consideration. He also relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for stay of operation of the impugned order/waiver of pre-deposit demanding duty alongwith interest and penalty amount. He also prayed that the applicant is facing acute financial hardship and is not in a position to make any pre-deposit. He also relied on the case law of Super Threading India Pvt. Ltd. Vs. Union of India (supra) wherein the Hon'ble Punjab Haryana High Court has held that the respondent shall not treat the appeal as being not maintainable on account of failure to deposit the amounts as per amended section 35F of the Central Excise Act, 1944 which came into existence on 6.8.2014. The Hon'ble High Court has also directed in the said case to the petitioner to make an application for interim reliefs for staying the demand on the basis of the provisions as they stood prior to 06.08.2014. This Tribunal in a similar circumstance had considered the stay application without insisting on pre-deposit as per amended section 35F of the Act and ordered accordingly. However, the revenue to distinguish the law laid down by the Hon'ble Punjab Haryana High Court and followed by this Tribunal in similar matter, has taken a baseless plea that as the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of the applicants and is like to cause grave irreparable injury to the applicants and on the other hand if the present stay applications are allowed, no loss will be caused to the respondent. Therefore, he prayed that waiver of pre-deposit be granted. 11. Heard the parties and considered the submissions. 12. After hearing the parties, we find that from the argument advanced by the learned Counsels, the following issues emerged before us: (1) Whether this Tribunal has inherent power to grant interim protection against imposition of such condition of mandatory pre-deposit for hearing the appeal on merits under section 35F of the Act or not? (2) If yes, whether the applicants are having a case for waiver of pre-deposit or not? Issue No-1 13. To answer the Issue No.1, the learned Counsel for the respondent submits that as per amended section 35F, any appeal filed after 6.8.2014, the applicant is required to make mandatory pre-deposit. Therefore, the question arises before us when there is a mandatory provision of pre-deposit for entertaining the appeal, in such scenario, whether this Tribunal is having inherent power to grant interim protection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the constitution of India and the statures confer different jurisdiction on the Court whereas inherent powers of the court are those necessary for ordinary and efficient exercise of jurisdiction already conferred. They are as such result of the very nature of its organization and are essential to its existence and protection and for the due administration of justice. The inherent power of a court is the power to do all things that are reasonably necessary for administration of justice within the scope of court's jurisdiction. The basic principal is to be found in Maxwell On Interpretation of statutes, eleventh Edition at page 350. The statement contained therein is that where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means as are essentially necessary to its execution. Learned counsel for the petitioners vehemently argued that the provision has to be read down to include the right to waive the condition by the appellate authority in an appropriate case. main emphasis was laid by the learned counsel for the petitioners on the judgment of the Apex Court in Income Tax Officer, Cannanore. M.K. Mohamad Kunhi, MAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the absence of any express provisions in sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal it must be held that no such power can be exercised by the Tribunal, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers such a power on the Income tax Officer who can give the necessary relief to an assessee. The right of appeal is a substantive right and the questions fact and law are at large and are open to review by the Appellate Tribunal. Indeed the Tribunal has been given very wide powers under section 254(1) for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Income Tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay or recovery the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the Legislature should have left the entire matter to the administrative authorities to make such o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal on the same ground without touching the merits of the controversy. Where the appeals are pending without an application for interim injunction/protection before the first appellate authority, the petitioner may file an application for interim injunction/protection before the appeals are taken up for hearing by first appellate authority and in case such an application is filed, the same shall be decided by the said authority keeping in view all the legal principles enunciated hereinbefore. The other cases where the first appellate authority had dismissed the appeal for want of pre-deposit without touching merits of the controversy or further appeal has been dismissed by the Tribunal, the said orders are set aside and the matter is remitted to the first appellate authority where the petitioners may file an application for interim injunction/protection before the appeals are taken up for hearing by the first appellate authority who shall adjudicate the application for grant of interim injunction/protection to the petitioner in the light of the observations made above. All the cases stand disposed of in the above terms. 17. In view of the above observations, the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g an appeal, the appellate authority, after affording an opportunity of being heard to the parties, shall make an order - (a) affirming or amending or cancelling the assessment or the order under appeal; or (b) may pass such order, as it deems to be just and proper. (8) The appellate authority shall a speaking order while deciding an appeal and send copies of the order to the appellant and the officer whose order was a subject matter of appeal. Section 35F. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal. The Tribunal or the Commissioner (Appeals) as the case may be, shall not entertain 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 lower in rank than the Commissioner of Central Excise; (ii) against the decision or order referred to in clause (a) of sub-section (1) of section 35B, unless the appellant has deposited seven and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Power Corporation (supra) held that this Tribunal is having inherent power to grant interim protection against imposition of such condition. for hearing the appeal on merits. Therefore, we answer the issue No.1 in favour of the applicant and hold that this Tribunal is having inherent power to grant interim protection to the applicant. Issue No.2 22. Whether the applicants are having prima facie case for waiver of pre-deposit or not? 23. We find that in the applicant own case of Karnal unit , this Tribunal has held that the test of manufacture has failed as the goods are not manufactured goods as per section 2(f) of Central Excise Act, 1944, therefore, the questions of excisabiliy does not arise. 24. Further, we find that the learned Standing Counsel for the respondent heavily relied on the decision of Ganesh Trading Co. (supra) to say that paddy and rice are different commodities which is excisable. We find that in the case of Ganesh Trading Co. (supra), the Hon'ble Apex Court has observed that the Punjab Sales Tax Act had made distinction between rice and paddy and the rice and paddy are treated differently and thus proceeded on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions filed by the petitioners. The order passed by the Hon'ble High Court thus remained an interim order as the petition was disposed of as infructuous and no final judgment/decision emanated. It is settled principle that interim orders are purely in the nature of an interim modality and workable formula or workable arrangement depending on the balance of convenience and not a binding precedent. In this regard, the Hon'ble Supreme Court in the case of Amresh Tiwari Vs. Lalta Prasad Dubey and another (2000) 4 SCC 440 = = 2000 SCC(Cri) 806 held as under:- It is settled law that interim orders, even though they may have been confirmed by the higher courts, never bind and do not prevent passing of contrary order at the stage of final hearing. In the case of Calvin Wooding Consulting Ltd. Vs. CCE, Mysore - 2007 (7) STR (411) (Tri. -Del.), this Tribunal made following observation Needless to say that, when an Interim Order is not binding in finally deciding the very appeal in which it is passed, it can hardly constitute a binding precedent. In these circumstances, with great respect, the interim order dt. 24.04.2015 of Hon'ble High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f different percentages in cases of identical nature, without any rhyme or reason. In fact this Court is burdened with appeals both under Section 35G of the Central Excise Act and Section 130 of the Customs Act, against the orders of the Tribunal granting or refusing to grant waiver. Therefore, the amendment to the provision has actually taken away the possibility of an arbitrary exercise of power and along with it, the threat of multiplicity of proceedings even at the stage of waiver applications. 80. Therefore, we are of the considered view that the writ petition in W.P. No. 13431 of 2015 seeking a declaration that the amended Section 35F of the Central Excise Act, 1944, is applicable only to show cause proceedings initiated on or after 6-8-2014 is liable to be dismissed. Accordingly it is dismissed. There will be no order as to costs. 31.2 In the case of Nimbus Communication Ltd. Vs. Commissioner of Service Tax, Mumbai-IV (supra), the Hon'ble Mumbai High Court has held as under:- 21. Having perused this judgment of the Division Bench and its reasoning, we are clear that Section 35F cannot be held to be unconstitutional. Section 35F only ensures tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after this date. Hence, the amended section is rightly applied to the above undisputed factual position. 24. We do not think that any provision of the nature pointed out in this appeal defeats or renders the vested right of appeal illusory. A very reasonable condition has been imposed and that, to our mind, in no way affects the vested right of appeal. 25. For the aforesaid reasons, we agree with the view taken by the Tribunal. We dismiss the appeal. There will be no order as to costs. 26. At this stage, Mr. Dada learned Senior Counsel submits that this Court should grant six months time to the appellant to comply with the statutory requirement and deposit the seven and a half per cent of the demand of duty and/or penalty in terms of the amended provision. This request is opposed by Ms. Cardozo. 27. Having heard both sides on this point, we direct that if the appellants deposit the sum mandated by Section 35F(1) with its provisos within a period of three months from the date of receipt of a copy of this order, the Tribunal shall entertain the said appeal and decide it on merits and in accordance with law. On failure, its earlier direction would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -HC-KERALA-ST=2015 (320) E.L.T. 51 (Ker.). The Kerala High Court has referred to an interim order passed by the Andhra Pradesh High Court in K. Rama Mohanarao v. Union of India - 2015-TIOL-511-HC-AP-CX . The Kerala High Court while adverting to the interim order referred to the settled law that the institution of a suit carries with it an implication that all rights of appeal then in force are preserved to the parties. With great respect, the judgment of the learned Single Judge of the Kerala High Court has not considered the express language which has been used in the amended provisions of Section 35F(1) of the Act. The order of the Andhra Pradesh High Court which was relied upon in the judgment of the Kerala High Court is only an interim order. 22. For these reasons, we hold that the petitioner would not be justified in urging that the amended provisions of Section 35F(1) of the Act would not apply merely on the ground that the notice to show cause was issued prior to the enforcement of Finance (No.2) Act, 2014. We find no merit in the constitutional challenge. The petition shall accordingly stand dismissed for the aforesaid reasons . 31.4 Similar view was taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied). Moreover, in this graded scheme, 7.5% of duty or penalty is to be deposited before appeal to the Commissioner (Appeals). For appeal to the Tribunal, further deposit of 10% of the duty or penalty is required. Further, there is a cap of ₹ 10 crore on the amount that is required to be deposited under section 35F. There is no cap prescribed in Punjab Vat Act. 35. It is thus clear that there are significant differences in the wording, scheme of pre-deposit and onerousness between Section 62 of the Punjab Vat Act and Section 35F of the Central Excise Act. Besides, object, incidence of duty and scheme of law of the two Acts are different. 36. In view thereof, I hold that the Section 62 of Punjab VAT Act or Section 35F are not in pari materia . The Hon'ble Supreme Court in the case of CCE, Pune Vs. Dai Ichi Karkaria Ltd. - 1999 (112) E.L.T. 353 (S.C.), has held in Para 21 that judgments relating to Income Tax or other statutes have no relevance while considering a provision in an excise statute. Hence, the decision of the Hon'ble Punjab Haryana High Court in the case of Punjab State Power Corporation Limited (supra) is not applicable in this case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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