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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 ..... filed with the department the DTA clearances of broken rice, rice bran an basmati rice without payment of duty which was required to be paid in terms of section 3(1) of the Central Excise Act, 1944 read with section 12 of the Customs Act, 1962, therefore, it was alleged that the appellant has made DTA clearances of broken rice, rice bran an basmati rice without payment of duty which was required to be paid in terms of section 3(1) of the Central Excise Act, 1944 read with section 12 of the Customs Act, 1962 with effect from the date of bonding. The show cause notices were adjudicated and the demand of duty was confirmed against the applicants alongwith interest and various penalties were also imposed. Aggrieved from the said orders, the applicants have filed the appeals alongwith stay applications for waiver of pre-deposit for entertaining the appeals filed before this Tribunal. 3. Learned Senior Standing Counsel for the respondent raised objection that the applications for pre-deposit are not maintainable as the applicants have failed to comply with the requirement of pre-deposit as per section 35F of Central Excise Act, 1944 is couched in a mandatory manner and the same cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant's own case in their Karnal unit although there is decision of this Tribunal, the issue in both cases is not identical. Further, the department is in process of filing SLP before the Hon'ble Supreme Court against the order of this Tribunal and the order of this Tribunal has been passed on wrong premise that rice is not a manufacturing commodity. Moreover, the Apex Court in the case of Ganesh Trading AIR 1974 SC 1362 has held paddy when converted into rice is a manufactured item. Further, rice and paddy are also commonly known to be two different an distinct commodities. Therefore, the rice is a manufactured item that discontinues to remain in its natural form. In that circumstance, he submits that the applicants are required to make pre-deposit as per section 35F of the Act. He further submits that as there is no doubt about the exisability of the said goods which emerged as result of manufacture, therefore, the department is having strong case. He also relied on the decision of the Apex Court in the case of Moti Laminates Pvt.Ltd. - 1995 (76) ELT 241 (SC), South Bihar sugar Mills Ltd. - 1978 (2) ELT (J-336) (SC) and Delhi Cloth and General Mills Ltd. - [AIR 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon. 8. It is his contention that this Tribunal has decided the application for stay of pre-deposit on 11.8.2015, there exist nothing further to decide in the writ petition filed by Super Threading (India) Pvt. Ltd. Therefore, the writ petition was disposed off. The order dated 13.8.2015 does not recall or set aside or modify the earlier order dated 24.4.2015. It goes without saying that the Hon'ble High Court was also pleased to grant liberty to the petitioner therein to challenge the order dated 11.8.2015 passed by this Tribunal. The said writ petition was disposed of by the Hon'ble High Court on the ground that requisite relief has already been granted, therefore, the petition has become infructuous, the same does not render the earlier direction of the Hon'ble High Court is not effective or not binding. Therefore, the binding nature of the order dated 24.4.2015 remain unaffected in any way. 9. He further submits that this Tribunal is having inherent power to adjudicate the stay application and pass an order of interim protection to the Assessee de-hors the condition of mandatory pre-deposit. To support this, he has placed reliance on the decision of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat interim order in the case of Super Threading (India) Pvt. Ltd. is not applicable as the writ petition has been disposed of by the Hon'ble High Court as infructuous. In fact, in the said case, initially the Hon'ble High Court has granted interim relief to the petitioner with a direction to file an application for waiver of pre-deposit before this Tribunal and on the direction of the Hon'ble High Court, this Tribunal had entertained the stay application filed by the petitioner, which was disposed of by this Tribunal. After disposing off the stay application by this Tribunal, the Hon'ble High Court found that nothing survive in the writ petition filed by the petitioner before the Hon'ble High Court, the petition was disposed of as infructuous. In that circumstance, as interim order has been complied with by this Tribunal, therefore, it cannot be said that the interim order passed in the writ petition by the Hon'ble High Court in the case of Super Threading (India) Pvt. Ltd. is not binding. In fact on the basis of that interim order passed by the Hon'ble High Court, this Tribunal had entertained the stay application and the same had been disposed of on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery of the realization of the penalty imposed by the departmental authorities on an assessee during the pendency of an appeal before it. After considering the matter, the Apex Court held that the Appellate Tribunal has power to grant stay as incidental or ancillary to its appellate jurisdiction subject to there being a strong prima facie case and satisfaction that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal. The relevant observations read as under:-- "4. There can be no manner of doubt that by the provisions of the Act or the Income-tax Appellate Tribunal Rules, 1963 powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee. At the same time it is significant that under s.220(6) the power of stay by treating the assessee as not being in default during the pendency of an appeal has been given to the Income-tax Officer only when an appeal has been presented under s.246 which will be to the Appellate Assistant Commissioner and not the Appellate Tribunal. There is no provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no right to even move an application when an appeal is pending before the Appellate Tribunal under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statue provides for such a matter being dealt with by the Income tax Officer. It is a firmly established rue that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland Statutory Construction, Third Edition, Art. 5401 and 5402). The powers which have been conferred by section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers, fully effective. In Domat's Civil Law Cushing's Edition, Vol.1 at page 88, it has been stated: "It is the duty of the Judges to apply the laws, not only to what appears to be regulated by their express dispositions, but to all the cases where a just application of them may be made and which appear to be comprehended either within the consequences that may be gathered from it." Maxwell on Interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o grant interim protection. 18. As the Hon'ble High Court has examined the issue under Punjab VAT Act, 2005, therefore, it is required to see whether the provisions of Punjab VAT Act, 2005 and Central Excise Act, 1944 are pari materia or not: the same are reproduced as under: Punjab Vat Act 2005 Central Excise Act, 1944 Section 62- First appeal (1) An appeal against every original order passed under this Act or the rules made thereunder shall lie, - (a) If the order is made by a Excise and Taxation Officer or by an officer incharge of the information collection centre or check post or any other officer below the rank of Deputy Excise and Taxation Commissioner; or (b) if the order is made by the Deputy Excise and Taxation Commissioner, to the Commissioner; or (c) if the order is made by the Commissioner or any officer exercising the powers of the Commissioner, to the Tribunal (2) An order passed in appeal by a Deputy Excise and Taxation Commissioner or by the Commissioner or any officer on whom the powers of the Commissioner are conferred, shall be further appealable to the Tribunal (3) Every order of the Tribunal and subject only to such order, the order of the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in dispute, or in penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed rupees ten crores; Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation. - For the purposes of this section "duty demanded shall include, - (i) amount determined under section 11D; (ii) amount of Erroneous Cenvat credit taken; (iii) amount payable under Rule 6 of the Cenvat Credit Rules, 2001 the Cenvat Credit Rule, 2002 or the Cenvat Credit Rules, 2004. 19. From the above, we find that the provisions of Rule 62(5) of Punjab VAT Act, 2005, and Section 35(F) of Central Excise Act, 1944 are pari materia and the Hon'ble High Court held that the appellate authority has the inherent power to entertain the prayer of waiver of pre-deposit despite mandatory provisions of pre-deposit. 20. As the Hon'ble High Court of Punjab & Haryana is jurisdictional High Court, therefore, we are bound to follow the decision/obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice remains in their natural form even after dehusking and are covered by terms "agricultural products." We also find that the decision of this tribunal in the applicant's own case for Karnal unit has not been stayed by any higher forum. The case law relied by the Ide Counsel for the respondent are applicable to the facts of the case in hand. Therefore, relying on the decision of this Tribunal in the applicant's own case for Karnal unit, the applicant has made out prima facie a case for waiver of pre-deposit. 25. In view of the above, the issue no.2 is also answered in favour of the applicant. 26. In the circumstances, we waive the requirement of pre-deposit of entire amount of duty, interest and penalties and stay recovery thereof during pendency of the appeals. Therefore, the balance of convenience lies in favour of the applicants and if the applicants are put to the terms of pre-deposit, the applicant shall suffer in irreparable loss. 27. Considering the fact that the revenue involved in these cases is more than Rs. 150 crores as duty, we direct the Registry to list the appeals for final disposal on. (Pronounced in the open court _________.) Per: Devender Singh 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) ELT 711 (All) and Pioneer Corporation Vs. UOI - 2016 (340) ELT 63 (Delhi), the Hon'ble High Courts have answered the question affirmatively. 31.1 In the case of M/s Dream Castle Vs. UOI (supra), the Hon'ble Madras High Court held as under:- "76. We do not know how the above passage goes to the rescue of the assessees. The argument of the assessees in the cases on hand is that the amendment would apply only to the proceedings that commence with the issue of show cause notices on or after 6-8-2014. In other words, the contention of the writ petitioner before us is that if a show cause notice had been issued on 5-8-2014, the amended provisions will not apply to an order-in-original passed in pursuance of the same, even if such an order is passed after 6-8-2014. The above Circular does not support this contention of the petitioner. 77. Lastly it is contended by Mr. Joseph Prabhakar that the assessees do not stand to gain by fighting on pre-deposit condition. If they lose the battle after exhausting all avenues, the assessees are obliged to pay the amount due, together with interest at a higher rate. Therefore, it is his contention that a provision that grants a temporary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a). This is not a case where the principle in Garikapatti Veeraya (supra) relied upon by Mr. Dada can be applied and for the reasons which have been assigned by the Allahabad High Court. 22. The view taken by the Division Bench of the High Court of Madras in Dream Castle (supra), with respect, is also in consonance with the statutory prescription and the intent. It has referred to all the decisions in the field and the rival contentions. The Division Bench of the Allahabad High Court and all other judgments, including of the Kerala High Court have been extensively referred to. The independent reasoning of the Division Bench of the High Court of Madras is, with respect, rightly construing and interpreting the statutory provision. As held by the Division Bench of the High Court of Madras, the substantive provision Section 35F after its amendment, is not capable of any other interpretation. Though the second proviso was referred, but the Division Bench independent thereof, agreed with the contention of the Revenue which is that the amended provision would have to be applied to all such appeals as falling within the second proviso. 23. We also arrive at the same conclusion and, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as amended, an appellant has to deposit the duty and penalty as stipulated and unless the appellant were to do so, the Tribunal shall not entertain any appeal. This provision would, therefore, indicate that it would apply 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 sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that the provisions of Punjab Vat Act, 2005 are pari materia to the Central Excise Act. Mandatory pre-deposit provisions in the VAT provisions in the Punjab VAT Act are similar to the Central Excise Act, 1944. 33. I find that though both Punjab VAT Act and the Central Excise Act are fiscal statutes, the object, incidence of tax/duty and scheme of law are different in the two Acts. Punjab VAT Act imposes taxes on sale of the goods whereas in the Central Excise Act, the duty is levied on the manufacture of the goods, but the payment of the same is deferred to the point of removal of the goods from the factory. 34. Although it is sought to be contended that the mandatory pre-deposit provisions are pari materia in the Central Excise Act and Punjab Vat Act, 2005, I find that there are material differences in the language and substance of two provisions. In the Punjab Vat Act, there are three levels of appeals upto Tribunal - before the Deputy Excise Taxation Commissioner, before the Commissioner and before the Tribunal. Whereas there are only two levels of appeals upto Tribunal in the Central Excise Act before the Commissioner (Appeals) and before the Tribunal. Further, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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