Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (9) TMI 676 - KERALA HIGH COURT

2016 (9) TMI 676 - KERALA HIGH COURT - 2016 (44) S.T.R. 569 (Ker.) - Waiver of pre-deposit - mandatory pre-deposit - constitutional validity of Sec.35F of the Act - The Tribunal heard the matter and passed an order, holding that Sec.35F would apply to the case of the petitioner irrespective of the fact that the proceedings commenced prior to 06/08/2014, the date on which amendment was brought in force. - Held that:- by virtue of Circular No.984/08/2014-CX dated 16/09/2014, clarification has been .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ec.35F. - the petitioners are liable to deposit 7.5% or 10%, as the case may be, for preferring appeals before the Commissioner (Appeals) or the Tribunal. - Decided against the appellant. - W.P.C.Nos.9991, 10881, 11288, 20393, 20638, 20668, 21346, 21348, 21354 & 22732 of 2016 - Dated:- 14-7-2016 - A. M. Shaffique, J. For the Petitioner : Sri Jose Jacob, Amritha Varshini M. For the Respondent : Sri John Varghese JUDGMENT Since these cases concern a common issue, the same are decided by a common j .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lenged the said demand by filing W.P.C.No.4616/2015. By judgment dated 04/03/2015, 3rd respondent was directed to re-consider the matter. On remittance, the matter was heard on 23/04/2015. Ext.P4 was passed on 11/05/2015 confirming the demand against the petitioner. Petitioner again challenged the matter before the High Court by filing WP(C) No.17144/2015 which was disposed on 09/06/2015 permitting the petitioner to pursue the alternate remedy of filing an appeal before the 2nd respondent, with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l heard the matter and passed an order dated 17/02/2016 (Ext.P8), holding that Sec.35F would apply to the case of the petitioner irrespective of the fact that the proceedings commenced prior to 06/08/2014, the date on which amendment was brought in force. 4. In WP(C) No.10881/2015, Ext.P7 is the order passed by the Commissioner of Central Excise and Customs on 19/12/2014 and Ext.P11 dated 17/02/2016 is the order passed by the Appellate Tribunal. 5. In WP(C) No.11288, Ext.P2 is the order passed b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ise, Customs & Service Tax on 26/12/2014. The petitioner seeks to quash Ext.P8 and for a declaration that Section 35F of the Act is not applicable to the appeals filed under Section 85 of the Finance Act. It is contended that the appeal is filed under Section 85 and not under Section 35F of the Act. In W.P.C.Nos.21348/2016, 21346/2016, 20668/2016, 20638/2016 and 20393/2016, similar contentions are urged. 7. In W.P.C.No.22732/2016, petitioner seeks for a direction to the 2nd respondent, Commi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xt.P2. 8. The contentions raised are two fold. One is that, Section 35F is prospective in operation and it applies only in respect of proceedings which commenced after 06/08/2014. It is contended that the second proviso which indicates that the provisions of the amended section shall not apply to stay petitions and appeals pending before the appellate authority prior to the commencement of Finance Act, 2014 goes contrary to the main provision. Reliance is placed on the judgment of the Apex Court .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

10881/2016 wherein they supported the stand taken by the authorities. It is stated that Section 35F of the Act was introduced with effect from 06/08/2014. In cases where duty and penalty are in dispute, the appellants have to deposit 7.5% of the duty or penalty. In the case of an appeal to the Tribunal against an order passed by the Commissioner (Appeals), requirement of pre-deposit is 10%. The first proviso restricts the amount to be deposited to a maximum of ₹ 10 Crores. Prior to the ame .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re the Commissioner (Appeals) or to the Tribunal. The requirement of a deposit of 10% is in the case of an appeal to the Tribunal against an order of the Commissioner (Appeals). The 2nd proviso makes it clear 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 (No.2) Act, 2014. It is contended that Sec.35F will apply to all appeals that are filed after 06/08/2014. It is contended that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppeal is a substantive right and institution of the suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the lis. The exceptions are when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and when the court to which appeal lay at the commencement of the suit stands abolished. It is further contended that thou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 35F-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 officer of Central Excise lower in rank than the Commissioner of Central Excise. (ii) against the decision or order referred t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lty, 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......." 11. There is no doubt about the proposition that appeal is a continuation of the pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al." Therefore, the restriction imposed is on entertaining any appeal. It definitely means that any appeal filed after 06/08/2014 cannot be entertained unless the pre-deposit is made in terms with the Statute. The second proviso is only a clarification which states that the provision will not apply to stay applications and appeals pending before any appellate authority prior to the commencement of the Act. Therefore, when the Statute itself makes it clear that the right of appeal is subject .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ring the scope and effect of the above provision, it is held at paragraphs 17 to 22 which reads 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 date of institution of the suit or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es dealing with substantive rights.- It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is " .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

w 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 operat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uty or, as the case may be, a penalty to the stipulated extent. These words in Section 35F of the Act would indicate that on and after the enforcement of the provision of Section 35F of the Act, as amended, an appellant has to deposit the duty and penalty as stipulated and unless the appellant were to do so, the Tribunal shall not entertain any appeal. This provision would, therefore, indicate that it would apply to all appeals which would be filed on and from the date of the enforcement of Sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after the enforcement of the amended provision on 6 August 2014 shall be governed by the requirement of pre-deposit as stipulated therein. The only category to which the provisi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

MANU/AP/0298/2015 : 2015-TIOL-511-HC-AP-CX. The Kerala High Court while adverting to the interim order referred to the settled law that the institution of a suit carries with it an implication that all rights of appeal then in force are preserved to the parties. With great respect, the judgment of the learned Single Judge of the Kerala High Court has not considered the express language which has been used in the amended provisions of Section 35F (1) of the Act. The order of the Andhra Pradesh H .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t; 13. Similarly, in the judgment of the Delhi High Court in Anjani Technoplast Ltd. v, Commissioner of Customs [2015 (326) E.L.T 472 (Del.), while considering the amended Section 129E of the Customs Act, 1962 and Sec.35F of the Central Excise Act 1944, which came into effect on 06/08/2014, the Delhi High Court held at paragraph 11 as under: "As already observed, it is possible that pursuant to an SCN, the adjudication proceedings may be dropped if the adjudication authority comes to the co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

age of the demanded duty as stipulated in clauses (i), (ii) or (iii) thereunder." The wording of the second proviso to the amended Section 129E is also unambiguous. It makes it clear that the amended provision would not apply to appeals and stay applications already "pending" before the appellate authority "prior to the commencement of the Finance (No. 2) Act, 2014", i.e. 6th August 2014. In other words, it would apply to all appeals filed on or after the said date. Ther .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at he has filed the appeal after the amendment was made in Section 35F of the Central Excise Act. Therefore, the amended provisions would apply and the appeal of the appellant before the CESTAT would not be maintainable in absence of deposit of an amount equivalent to 7.5% of the confirmed amount of duty liability. The other aspect of the matter is that if the argument of the learned counsel for the petitioner is accepted then he is required to pre-deposit 100% of the excise duty levied on him a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sidered the same issue and upheld the direction to deposit the amounts specified under Section 35F. 16. The Madras High Court, by judgment in M/s.Dream Castle v. Union of India and Others [2016-TIOL-1009-HC-MAD ST], while considering the aforesaid issue, followed the judgment of Allahabad High Court in Ganesh Yadav (supra). 17. Going by the law laid down by the various High Courts as stated above, I do not think that a different view is possible. Further, by virtue of Circular No.984/08/2014-CX .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version