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TMI Blog2019 (7) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... or to commencement of Finance (Nos.2) Act, 2014. Prior to amendment, there was a discretion given to the tribunal, to dispense with the pre-deposit. A right to appeal, is only a statutory right. The right to file an appeal can be hedged by conditions. If the argument of the petitioner is accepted then it would mean that there is a vested right in any appellant to claim the benefit of waiver of pre-deposit. Reading of Section 129E, as it stood prior to amendment shows that the appellant, before the tribunal, would apply to the tribunal for waiver of the entire pre-deposit and it was the discretion of the tribunal, whether to waive it or not. Further the proviso to section 129E after amendment does states that the pre-amended section will apply only to appeals. Pending on the commencement of Finance (No.2) Act 2014. Therefore, an appeal filed after the amendment should be governed by the old Section The entire Section 129E now stands substituted by the amended Act 25 of 2014. In such a case, the appeal would be governed only by the Section which stands on the date, when the appeal is sought to be filed - Section 6 of the General Clause Act, which deals with repeal cannot be applied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Registration No.AABCH3946AXM003 dated 27.10.2006. 3. According to the petitioner, on 05.02.2007 and 06.02.2007, respectively the officers of Central Excise, Chennai III Commissionerate conducted an investigation at the premises of the petitioner company and during the course of investigation, recorded statements from various persons of the petitioner company, under pressure. Investigation culminated in the issuance of a Show Cause Notice No.26/2007, dated 03.09.2007 alleging that, "(a) That the petitioner company had diverted certain dyed woven fabric in the local market, which were imported duty-free, thereby leading to shortage of fabrics. (b) That M/s.Hi-Bright Exports Pvt. Ltd. (hereinafter referred to as 'HBE'), an independent Domestic Tariff Area (DTA) unit at Tirupur utilized the aforesaid dyed woven fabrics for manufacturing ready-made garments. (c) That certain ready-made garments manufactured out of aforesaid dyed woven fabrics were diverted in the local market without payment of appropriate import duty leviable on such goods. (d) In spite of the petitioner company having executed a B-17 Bond under Section 59 of the Act, goods were cleared for hom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice were confirmed and consequently confiscated the goods seized under Section 111(j) of the Act; imposed a duty of ₹ 1,38,42,452/- on the petitioner company under Section 72 read with Section 28(2) of the Act; imposed a penalty of ₹ 7,50,000/- against the petitioner company under Section 112(a) of the Act; imposed a penalty of ₹ 1,38,42,452/- under Section 114A of the Act; confirmed the demand of interest under Section 28AB of the Act; ordered for appropriation of the bank guarantee of ₹ 6,25,000/- executed in terms of the B-17 Bond and adjust the same towards the above-mentioned demand of ₹ 1,38,42,452/-; imposed a personal penalty of ₹ 15,00,000/- on me and a personal penalty of ₹ 7,50,000/- on one Mr.T.Arunachalam (one of the directors of the Petitioner Company) under Section 112 of the Act. 6. According to the petitioner, the Commissioner of Central Excise, Chennai III Commissionerate, Chennai, 2nd respondent herein, without proper notice to the petitioner company, auctioned the goods seized from the petitioner company for an amount of ₹ 1,20,94,656/-, which fact the petitioner company became aware of only, vide the 2nd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to the writ petitioner, the petitioner's right to file an appeal, accrued as early as in 31.12.2008 and Section 129E of the Customs Act, 1962, which was amended only from 06.08.2014 and therefore, the appeal should have been governed by the then existing Section and not by the Section as amended in 2014. The petitioner, therefore, would state that under the unamended Section 129E, the tribunal had the discretion to waive the entire pre deposit amount. It is therefore contended in the writ petition that 129E as amended in 2014, cannot be made applicable to the facts of the present case. 12. The petitioner also states that in any event, the 1st respondent had accepted the plea of the Managing Director of the petitioner company that if the benefit of Customs notification No.14/2003, is extended to the petitioner, the liability of duty would be reduced by 40%, which inturn will bring down the penalty imposed on the Managing Director. It is stated that since the petitioner has already deposited ₹ 6,25,000/-, the requirement to pay 7.5% on the alleged duty payable, would not have arisen. 13. Heard the learned counsel for the parties and perused the materials avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited 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 the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of subsection (1) of section 129A, unless the appellant has deposited ten 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 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. 16. On the comparison of the above, it could be seen that after the amendment, the appellant has to deposit 7.5% of the duty, in case where duty or duty and penalty are in dispute, or penalty, whether such penalty is in dispute, in pursuance to a decision or an order passed by an officer of customs. 17. There is no provision to waive, the pre-deposit of 7.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the amendment should be governed by the old Section 20. In any event, the entire Section 129E now stands substituted by the amended Act 25 of 2014. In such a case, the appeal would be governed only by the Section which stands on the date, when the appeal is sought to be filed. This issue, has been considered by another Division Bench of this Court in Dream Castle Vs. Union of India, reported in 2015(43) STR 25(MAD), wherein this Court observed as under. "57. That leaves us only with one more type of condition namely the condition to make a pre-deposit of a fixed percentage of the tax demanded or penalty levied or both. The answer to the question raised in this writ petition lies squarely in our answer to the question as to whether the condition of this nature requiring the assessee to make a pre-deposit of 7.5% could be placed in between the categories narrated in (i) and (ii) or in between categories narrated in (ii) and (iii) above. If this condition falls in between categories (i) and (ii), it is more onerous than the existing condition and hence, cannot take retrospective effect. If this condition falls in between categories (ii) and (iii), it is less onerous than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the learned Senior Counsel for the writ petitioner revolves around the legal effect of a proviso. We have already extracted the amended Section 35-F in a tabular column given in para 19 above. 61. There are two provisos to the amended Section 35-F. The first proviso states that the amount required to be deposited under the new Section, shall not exceed ₹ 10 Crores. The second proviso states 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 Finance Act 2 of 2014. 62. Taking clue from the second proviso, the Allahabad High Court held in para 20 of its decision in Ganesh Yadav that the appeals filed on or after the commencement of the amended provision on 6.8.2014 shall be governed by the requirement stipulated therein. In other words, the second proviso excluded certain types of cases from the purview of the amendment and the Allahabad High Court came to the conclusion that cases which do not fall within such exclusions, should be taken to be covered by the amended provision. 63. Therefore, it is sought to be contended by Mr.C.Natarajan, learned Senior Counsel appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent purposes: (1) qualifying or excepting certain provisions from the main enactment; (2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision." 67. In Ali MK vs. State of Kerala [AIR 2003 SC 4006], the Supreme Court quoted with approval the opinion rendered by the Privy Council in Jinnings vs. Kelly 1940 AC 206, to the effect that a proviso cannot be used to import into the enacting part, something which is not there. But where the enacting part is susceptible to several possible meanings, it may be controlled by the proviso. 68. In the light of the principles of law laid down in the above decisions, it is contended by Mr.C.Natarajan, learned Senior Counsel that the second proviso cannot be taken to curtail the effect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, based upon Sub-Sections (3) and (3-A) of Section 85 of the Finance Act, 1994 and the interpretation given to the same by this Court in Winwind Power Energy Private Limited, does not appeal to us. The curtailment of a period of limitation, by way of amendment, takes away a vested right of appeal. An amendment that takes away the right of appeal stands on a different footing from an amendment that merely changes the condition precedent for the filing of the appeal. 74. Mr.Joseph Prabhakar, learned counsel, also advanced arguments on the basis of two Circulars dated 16.9.2014 and 5.1.2015. In para 1.2 of the Circular dated 16.9.2014, it was stated that the amended provisions would apply to appeals filed after 6.8.2014 and that Section 35-F of the Central Excise Act and Section 129-E of the Customs Act, contain specific saving clauses providing that all pending appeals/ stay applications filed till the enactment of the Finance Bill shall be governed by the erstwhile provisions. 75. On the ground that the aforesaid para 1.2 of the Circular dated 16.9.2014 created some confusion, the second Circular dated 5.1.2015 was issued. Para 4 of the second Circular reads as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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