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2015 (10) TMI 2446 - DELHI HIGH COURT

2015 (10) TMI 2446 - DELHI HIGH COURT - 2015 (326) E.L.T. 472 (Del.) - Failure to make pre-deposit of 7.5% to entertain appeal - SCN issued for non-fulfilment of export obligation - Appellant contended that amendment to Section 129E would not be applicable to them since SCN was issued prior thereto on 10th June 2014 and CESTAT erred in dismissing the appeal on account of non-compliance of amended Section 129E Held That:- CESAT had to apply the second proviso to the amended Section 129 E since .....

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1127/2015 - Dated:- 20-10-2015 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr. Sushil K. Tekriwal and Dr. Mamta Tekriwal, Advocates For the Respondent : Mr. Satish Kumar, Senior standing counsel ORDER Dr. S. Muralidhar, J. 1. This appeal by Anjani Techoplast Limited, under Section 130 of the Customs Act, 1962 ( Act ), is directed against the impugned judgment dated 7th July 2015 passed by the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) whereby the appeal in SR. No .....

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377; 5,96,03,154.51 payable by the Appellant under Section 143 (3) read with Section 28 of the Act. By said order the Appellant was held liable to pay interest and penalty of ₹ 1,49,00,000 under Section 112 of the Act. 3. Aggrieved by the above order, the Appellant filed the aforementioned appeal before the CESTAT which came up for hearing on 7th July 2015. After noticing the fact that Appellant had failed to make the pre-deposit of 7.5% of the duty demanded in terms of Section 129E of the .....

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f the amended Section 129E of the Act. Reliance was placed on the decision of the Single Judge of the Kerala High Court in Muthoot Finance Limited v. Union of India 2015 LawSuit (Ker) 238 and the decision dated 12th June 2015 of the High Court of Judicature at Madras in Writ Petition No. 12546 of 2015 (Fifth Avenue Sourcing (P) Limited v. Commissioner of Service Tax). 5. Mr. Satish Kumar, learned Senior standing counsel for the Respondent, on the other hand referred to the relevant paragraphs of .....

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14, to provide for mandatory pre-deposit of a fixed percentage of the duty demanded as a pre-condition to the CESTAT entertaining an appeal. For an appeal against the order passed by an officer of the rank of the Commissioner of Customs and below it was 7.5% and for an appeal against the order of the Commissioner (Appeals) it was 10%. The first proviso to Section 129 E stated that the pre-deposit made thereunder would not exceed ₹ 10 crores. The second proviso to Section 129E of the Act cl .....

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e was called upon to make the mandatory deposit of 7.5% of the duty for his appeal to be entertained, the Assessee preferred a writ petition challenging the constitutional validity of Section 35 F of the CE Act as amended with effect from 6th August 2014. The Division Bench of the Allahabad High Court noticed that prior to the said amendment, the CESTAT had a discretion to waive the amount of the pre-deposit either wholly or in part subject to certain conditions being fulfilled. The Assessee had .....

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trary or irrational. It, therefore, negatived the challenge to its constitutional validity. 8. In Ganesh Yadav v. Union of India (supra) the Allahabad High Court next dealt with the specific contention of the Assessee therein that the amended Section 35 F of the CE Act which was brought into effect from 6th August 2014, would not apply to the Assessee since the SCN to it was issued on 19th September 2013. It was contended that the amendment to Section 35F cannot retrospectively abridge or curtai .....

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996 SC 1560 and Mohd. Saud v. Dr. (Maj.) Shaikh Mahfooz (2010) 13 SCC 517, the Allahabad High Court concluded in para 17 of its judgment as under: 17. Thus, the principle of law which emerges is that the right of appeal is a vested right and the right to enter a superior Court or Tribunal accrues to a litigant as on and from the date on which the lis commences although it may actually be exercised when the adverse judgment is pronounced. Such a right is governed by the law which prevails on the .....

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nded Section 35 F indicated that on and after the date of its enforcement an Assessee in appeal was required to deposit the stipulated percentage of duty and if it failed to do so, the CESTAT shall not entertain the appeal. The amended Section 35 F would, therefore, apply to all appeals filed on and from the date of the enforcement of the amended Section 35 F of the CE Act. The Allahabad High Court declined to concur with the view expressed by the learned Single Judge of the Kerala High Court in .....

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petition since the Petitioner in that case had an effective statutory remedy before an appellate Tribunal. The High Court nevertheless stated that the appellate Tribunal would consider the application filed by the Petitioner for waiver of as pre-deposit on merits under the Finance Act 1994 as it stood prior to the amendment introduced with effect from 16th August 2014. With the greatest respect to the learned Single Judge who delivered the above decision it is not understood how, pursuant to the .....

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then in force are preserved to the parties. A demand of tax raised by way of a SCN does not get crystallised till there is an adjudication of the SCN. There can be no parallel therefore with the institution of a suit. Thirdly, the clear language of the second proviso to amended Section 35 F of the CE Act, the validity of which was not in challenge before either the Kerala High Court or the High Court of Telangana and Andhra Pradesh High Court in K. Rama Mohanarao v. Union of India (supra) does n .....

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by itself creates a vested right in the noticee as regards the appeal that may be filed against the adjudication order pursuant to such SCN. As already observed, it is possible that pursuant to an SCN, the adjudication proceedings may be dropped if the adjudication authority comes to the conclusion that no demand requires to be created. Consequently, the relevant date if at all would be the date of creation of the demand which does not get crystallised till the adjudication order confirming the .....

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