NETAMBIT INFOSOURCE & E. SERVICES PVT. LTD. Vs. C.C., C.E. & S.T.
LAWS(CE)-2015-2-66
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on February 26,2015

Netambit Infosource And E. Services Pvt. Ltd. Appellant
VERSUS
C.C., C.E. And S.T. Respondents




JUDGEMENT

R.K.SINGH, J. - (1.)
(2.)THE appellants have filed their respective appeals on or after 6 -8 -2014 without the mandatory pre -deposit required under Section 35F of the Central Excise Act, 1944 as amended with effect from 6 -8 -2014. When the Registry required them to make the mandatory pre -deposit, they submitted that in their view, as the respective show cause notices in their cases were issued prior to 6 -8 -2014 they are not required to make the mandatory pre -deposit and that their case should be put up to the CESTAT Bench for decision on this issue. That is how the case is before us. During the hearing, the appellants have essentially put forth the following arguments:
(i) Where return filed by the noticee is disputed by the department by issue of SCN, a "LIS" arises.

(ii) Where "Lis" arise, the substantive right of appeal vested in the noticee accrues. The right of appeal and the provision of law regulating the appeal on that date shall apply.

(iii) On the date when SCN was issued, Section 35F of Central Excise Act provided unfettered right of appeal by filing application for waiver of pre -deposit.

(iv) The amended Section 35F deprives the appellant to file an appeal with application for waiver of pre -deposit and provided for mandatory deposit.

(v) For the purpose of accrual of the right of appeal the critical and relevant date is the date of issue of SCN initiating the proceedings and not the decision.

(vi) A provision which is calculated to deprive the noticee of the unfettered right of appeal cannot be regarded as alteration in procedure.

The new requirement whittles down the right itself and cannot be regarded as a mere rule of procedure.

(vii) The filing of appeal after 6th August, 2014 is matter of procedure and it cannot change the law applicable for filing appeal on the date SCN was issued.

(viii) Second Proviso to amended Section 35F reads as under: -

"Provided further that the provision of this section shall not apply to the stay application and appeals pending before any appellate authority prior to the commencement of the Finance (No. 2) Act, 2014."

Thus the requirement of mandatory pre -deposit is not applicable to the appeals pending before any appellate authority as on 6th August, 2014 even if the respective SCNs were issued prior to 6th August, 2014. In the present appeals also, the SCNs were issued prior to 6th August, 2014. Merely because these appeals are filed after 6th August, 2014 applying the amended provision will amount to discrimination between similarly situated appeals on the basis of date of filing only.
They also cited the following case laws in support of their contentions.
(i) Hossein Kasam Dada (India) Ltd. v. State of Madhya Pradesh - : 1953 SCR 987

(ii) M/s. Bajaj Overseas Impex v. Special Commissioner - WP (C) No. 2766 of 2013, dated 8 -5 -2013

(iii) Commissioner of Income Tax v. Vatika Township Pvt. Ltd. - : 2009 (314) ITR 338 (S.C.)

(iv) Avani Exports v. Commissioner of Income Tax - : 2012 (7) TMI 190 -Guj. (H.C.)

(3.)WE have considered the contentions of the appellants. Section 35F prior to and with effect is 6 -8 -2014 are reproduced below: -
Provisions of Section 35F of the Central Excise Act, 1944 w.e.f. 6 -8 -2014

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 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 office 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 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 sub -section (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 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 - i.e. 6 -8 -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 or the CENVAT Credit Rules, 2002 or the CENVAT Credit Rules, 2004.

Provision of Section 35F of the Central Excise Act, 1944 prior to 6 -8 -2014

35F. Deposit, pending appeal, of duty demanded or penalty levied. - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied:

Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue:

Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its Filing.

Explanation. - For the purpose 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 57CC of Central Excise Rules, 1944;

(iv) amount payable under rule 6 of CENVAT Credit Rules, 2001 or CENVAT Credit Rules, 2002 or CENVAT Credit Rules, 2004;

(v) interest payable under the provisions of this Act or the rules made thereunder.

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