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TMI Blog2022 (5) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. The position as of now stands can be summarized as: prior to 06.08.2014, the pre-deposit of percentage of duty confirmed or penalty imposed for filing appeal before the Commissioner (Appeals) or the CESTAT was not mandatory and decision in this regard was to be taken by the Commissioner (Appeals) and/or the CESTAT on the merit of the case. The Appellate Authority was vested with discretion to decide the amount of pre-deposit required to be made by the appellant after taking into consideration the merits of the case and/or considering financial hardship caused to the assessee. This apart, safeguard of the interest of revenue was also one of the factors. The Appellate Authority was even competent to order for partial predeposit or to waive the pre-deposit altogether. However, with effect from 06.08.2014, such discretion of the Commissioner (Appeals) and/or CESTAT has been dispensed with. If the prescribed pre-deposit is not made by the time of entertainment of the appeal, the appeal is liable for rejection. It is an undisputed position that a right to file an appeal is not an absolute right but a right bestowed by the statute. Thus, such a statutory right of appeal can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the CESTAT ), whereby the demand of differential excise duty of Rs.333,22,45,002/- along with interest and penalty raised in the Order-in- Original dated 29th November, 2017 raised by the Commissioner of Central Tax, GST CX Commissionerate, Rourkela has been affirmed for non- fulfillment of the condition of pre-deposit of 7.5% of the duty subject to the amount specified in the first proviso to Section 35(F) of the Central Excise Act, 1944 (as amended vide the Finance (No. 2) Act, 2014 (No. 25 of 2014), published in Gazette of India, Extraordinary No.29, dated 06.08.2014). 3. The petitioner has taken a stand that the valuation of iron ore pellets cleared from its unit should have been in terms of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 inasmuch as the clearance of said iron ore pellets were made to its own units which cannot be comprehended within the meaning of related units , rather than modalities prescribed under Rule 4 of said Rules as claimed by the Revenue. Therefore, the differential amount sought to be raised by way of demand is arbitrary and contrary to already settled cases by the Courts/CESTAT. It is fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und to meet the requirement of the predeposit condition. However, it will depend upon the language of statutory provisions and particularly the words used therein as to whether the memo of appeal can be presented/filed or instituted without meeting the pre-deposit condition. In case entertaining the appeal is not permissible, the appeal can be filed, but may not be heard on merit unless the pre-deposit condition is met. The pre-deposit condition is imposed to regulate the procedure of appeal. Therefore, in such an eventuality, where there is no prohibition for filing the memorandum of appeal without meeting the predeposit condition, the appeal can be heard only after meeting it. 8. As is revealed from the record, it is admitted fact that the petitioner had not deposited as statutorily required to do under Section 35F of the Central Excise Act. However, enclosing copy of e-receipt to the Memo dated 19.04.2022 the counsel for the petitioner submitted that the petitionercompany has made a payment of Rs.10,00,00,000/- (rupees ten crores) which is the maximum amount specified under the first proviso to Section 35F of the Central Excise Act for compliance of mandatory requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 lower in rank than the Principal Commissioner of Central Excise or Commissioner of Central Excise; (ii) against the decision or order referred to in clause (a) of subsection (1) of Section 35B, 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 the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of subsection (1) of Section 35B, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory and meaningless? The Hon ble Court held as follows: In any case the principle laid down in Matajog Dubey Vrs. H.C. Bhari Dobey, 1955 (2) SCR 925 states with clarity that so long as there is no express inhibition, the implied power can extend to doing all such acts or employing such means as are reasonably necessary for such execution. The reliance on the principle laid down in Mohammed Kunhi, (1969) 2 SCR 65 cannot go to the extent, as concluded by the High Court, of enabling the Appellate Authority to override the limitation prescribed by the statute and go against the requirement of pre-deposit. The Hon ble Supreme Court in the said case being Tecnimont Pvt. Ltd. Vrs. State of Punjab, 2019 SCC OnLine SC 1228 further observed as follows: 30. As stated in P. Laxmi Devi, (2008) 4 SCC 720 and Har Devi Asnani, (2011) 14 SCC 160, in genuine cases of hardship, recourse would still be open to the concerned person. However, it would be completely a different thing to say that the Appellate Authority itself can grant such relief. As stated in Shyam Kishore, (1993) 1 SCC 22 any such exercise would make the provision itself unworkable and render the statutory intendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w is hard but it is the law . Even if the statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal enactment must be interpreted in its plain and literal sense as that is the first principle of interpretation. 10. In Martin Burn Ltd. Vrs. The Corporation of Calcutta, AIR 1966 SC 529, the Hon ble Supreme Court while dealing with the same issue observed as under: A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. A statute must of course be given effect to whether a Court likes the result or not. 11. Similar view has been reiterated by the Hon ble Supreme Court in The Commissioner of Income-tax, West Bengal-I, Calcutta Vrs. M/s. Vegetables Products Ltd., AIR 1973 SC 927. 12. It is the settled legal position that taxing statute must be construed strictly. (vide Manish Maheshwari Vrs. Assistant Commissioner of Income-tax ors., AIR 2007 SC 1696; Southern Petrochemical Industries Co. Ltd. Vrs. Electricity Inspector ETIO ors., AIR 2007 SC 1984; and Bhavya Apparels (P) Ltd. anr. Vrs. Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity, the same cannot be equated to a vested right. A mere chance of convincing the Appellate Authority to exercise the discretion for the grant of a total waiver is no vested right. The amendment, in our considered view, did not take away a right vested, but merely made a chance divested. What has now gone, is not the right, but the chance or hope. Therefore, the first contention of the learned Senior counsel for the petitioner is liable to be rejected. 33. There is another line of judgments taking a view that right of appeal is a creation of statute and the legislature is competent to determine the conditions on which an appeal would lie. These are not the cases of amending or repeal of a statute, therefore, such judgments are not applicable to the questions arising in the present application. 14. This Court, in Jindal Stainless Ltd. Vrs. State of Odisha, reported in (2012) 54 VST 1 (Ori) delved into the question as to whether the condition precedent for pre-deposit of tax or interest or both in dispute in addition to payment of admitted tax for entertaining an appeal as provided under Section 77(4) of the Odisha Value Added Tax Act, 2004 read with proviso to Rule 87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (g) Cap of Rs.10 Crores (1st proviso to Section 35F) makes the provision of new Section 35F more balanced; (h) Change in the provision of unamended Section 35F and the newly substituted Section 35F is mere procedural; (i) By virtue of substituted Section 35F the collection of revenue in case appeals are being preferred, will be in a systematic manner; Thus, the classification has reasonable nexus with the aforesaid object, sought to be achieved by the Act. No legislation relating to tax can be declared to be illegal, much less unconstitutional, on the ground of being harsh, on the anvil of Article 14 of the Constitution of India otherwise, every tax payer will feel every legislation relating to taxation to be a harsh one. The broader classification is to be seen and not the micro classification. Against such lucid analysis of amended provisions in Section 35F vis- -vis provisions as they stood prior to amendment being challenged before the Hon ble Supreme Court in S.L.P.(C) No. 31297 of 2016 [Satya Nand Jha Vrs. Union of India], the same came to be dismissed vide Order dated 07.11.2016. 16. In the case of Santani Sales Organisation Vrs. Central Excise, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; otherwise it would require adding the words filing of to the above provisions. Section 35F of the Central Excise Act did not bar a party from filing an appeal unless the amounts of tax and penalty demanded by the adjudicating authority are deposited. Upon cumulative reading of legal position as settled in Indian Oil Corporation Vrs. Odisha Sales Tax Tribunal, Cuttack, 2009 (Supp.1) OLR 928 = 109 (2010) CLT 355 and Satya Nand Jha Vrs. Union of India, 2016 SCC OnLine Jhar 2323 = (2017) 2 AIR Jhar R 619 = (2016) 4 JBCJ 392 (HC), this Court does not see any reason to interfere with the view expressed by the Commissioner (Appeals), Bhubaneswar. Since the Order-in-Original itself is dated 29th November, 2017, i.e., much after Section 35F has been amended with effect from 6th August, 2014, the Petitioner cannot avail a benefit of second proviso to Section 35F Act (post amendment). 19. For the reason that by the date of entertainment of appeal no evidence was placed on record by the petitioner-appellant to show that it had complied with the condition hedged for entertainment of appeal . However, in view of the undisputed contents of the Memo dated 19.04.2022 and the application acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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