TMI Blog2016 (8) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... inal was challenged in appeal which is filed in this case after 6th August, 2014, and the stay application was also after this date. Hence, the amended section is rightly applied to the above undisputed factual position. appeal allowed with a direction - CENTRAL EXCISE APPEAL NO. 161 OF 2016 - - - Dated:- 25-7-2016 - S.C. DHARMADHIKARI DR.SHALINI PHANSALKAR-JOSHI, JJ. Mr. Rafique Dada, senior counsel with Mr. Prakash Shah, Mr. Vishal Agarwal, Mr. P.L. Shetty and Ms. Isha Shah for the Appellant. Ms. P.S. Cardozo with Mr. Joel Carlos for the Respondents. ORAL JUDGMENT: [Per S.C. Dharmadhikari, J.] 1. This appeal is against an order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai, dated 17th December, 2015. 2. The application for stay was dismissed because the appellant failed to comply with the mandatory condition of pre-deposit of 7.5% of the tax amount demanded. The Tribunal relied upon the amended section 35F of the Central Excise Act, 1944, which was brought on the Statute Book with effect from 6th August, 2014. The present appeal, which raises substantial questions of law, is, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand and imposed equivalent penalty. That order-in-original dated 16th June, 2015, was challenged by way of an appeal before the Customs, Excise and Service Tax Appellate Tribunal (for short CESTAT ). An application was made before the CESTAT and it was claimed that the unamended provision would apply and that would govern the appeal. If that governs the appeal, then, there is no requirement of deposit and a mandatory one of 7.5% of the tax amount demanded but there is a discretion in the Tribunal to waive this condition of pre-deposit on the appellant satisfying it that there is a strong prima facie, case and that undue hardship would be caused in the event the stay is refused. 5. Upon such an application, after hearing both sides, the Tribunal opined that the amended provisions are clear. Once there is a proviso and styled as second proviso to the sub-section of section 35F and so long as that governs and holds the field, it will not be possible to agree with the appellant. Holding thus and following the judgment of the Allahabad High Court in the case of Ganesh Yadav vs. Union of India 2015 (39) Excise Tax Reporter 177, the Tribunal directed compliance with the amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H); (2) Muthoot Finance Ltd. vs. Union of India, 2015 (320) ELT 51 (Ker.) (3) Ganesh Yadav vs. Union of India, 2015 (320) ELT 711 (All.) 9. On the other hand, Ms. Cardozo appearing on behalf of the Revenue would submit that there is no merit in the appeal. The view taken by the Tribunal is in consonance with the amended section 35F and the second proviso thereto. She would submit that once the legislative intent is apparent and is expressed in plain and unambiguous language, then, there is no scope for any interpretation. This is not a case of right of appeal being curtailed or taken away or rendered illusory. It is only that the appeal cannot be entertained by the Tribunal unless the tax demand and to the extent of 7.5% is secured by the assessee. The condition, as imposed, is reasonable, fair, just and not at all excessive or onerous. Therefore, this Court should not interfere with the impugned order and proceed to dismiss the appeal. Apart from the view taken by the Allahabad High Court in Ganesh Yadav (supra), Ms. Cardozo also brings to our notice the order passed by the High Court of Madras in the case of Dream Castle vs. Union of India Writ Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a half percent 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 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 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 pendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision or order appealed against. However, the first proviso makes it clear that the amount required to be deposited under this section shall not exceed rupees ten crores and the second proviso is very important for our purpose. It 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 the Finance Act No.2 of 2014. It is common ground that the date of the commencement of this Finance Act is 6th August, 2014. It is further common ground that section 35B provides for appeals to the Appellate Tribunal whereas by section 35F what is contemplated is deposit of certain duty demanded or penalty imposed before filing appeal. By section 35F as amended, the Tribunal or the Commissioner, as the case may be, shall not entertain any appeal unless compliance is made of the above condition. 13. Although the second proviso clarifies and amply that the section itself will not apply to the stay application and pending appeals before any appellate authority prior to the commencement of the Finance Act No.2 of 2014, it is urged by Mr. Dada that an appellate package flowing from section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the lis commenced even before the show cause notice was issued which, in any event, was issued in the year 2012, but there was three and a half year time lag in its adjudication. It is no fault of the appellant and that is why the governing law would be the one which was prevailing at the date of commencement of the lis and not the one which was sought to be applied by the Tribunal. 17. This view is consistently taken by the Hon'ble Supreme Court in the case of an appeal guaranteed by section 96 of the Code of Civil Procedure. That is an appeal to challenge an original decree and judgment of the trial court in a suit. As far as that is concerned, the Hon'ble Supreme Court clarified that the law applicable on the date of commencement of the lis would be the governing law and would continue to govern even the vested right of appeal guaranteed by section 96 of the Code of Civil Procedure. 18. As against this, we have a view which has been taken by the Division Bench of the Allahabad High Court. In the case of Ganesh Yadav, the service tax demand confirmed by the Additional Commissioner, Central Excise, Customs and Service Tax, Allahabad, was sought to be impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or necessary intendment. Every statute, it has been said , observed LOPES, L.J., which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect . As a logical corollary of the general rule, that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, there is a subordinate rule to the effect that a statute or a section in it is not to be construed so as to have larger retrospective operation than its language renders necessary. In other words close attention must be paid to the language of the statutory provision for determining the scope of the retrospectivity intended by Parliament. (emphasis supplied) 19. Parliament while substituting the provisions of Section 35F of the Central Excise Act, 1944 by Finance Act (No.2) of 2014, has laid down that the Tribunal or the Commissioner (Appeals) shall not entertain any appeal unless the appellant has deposited the duty or, as the case may be, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 of 2014. The Division Bench expressed its disagreement with the view of the Kerala High Court. The Division Bench held that the express language of the amended provisions of section 35F(1), particularly the provisos cannot be ignored. 21. Having perused this judgment of the Division Bench and its reasoning, we are clear that section 35F cannot be held to be unconstitutional. Section 35F only ensures that the appeal shall not be entertained unless the amount to the extent mentioned therein is secured. The interest of the Revenue which has to be secured was the paramount consideration in both the unamended and amended provision. Now there is a specific stipulation and the extent to which the interest of the Revenue has to be secured is also clarified. Once there is a clear indication from the language of the Statute and which is plain and unambiguous, then, we do not think that the view taken by the Kerala High Court can be accepted. We would prefer to agree with the Hon'ble Division Bench of the Allahabad High Court in Ganesh Yadav (supra). This is not a case where the principle in Garikapatti Veeraya (supra) relied upon by Mr. Dada can be applied and for the reasons whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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