Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (11) TMI 1339

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Member(Technical) Shri Hari Radhakrishnan, Advocate for Appellant 1 Shri A. Sarveshwara Rao, Advocate for Appellant 2 None for the Appellant 3 Shir Bharat Ram, Advocates for the Appellant 4 Shri Guna Ranjan, AR for the Respondents [Order per: Sulekha Beevi, C.S,] 1. The appeals have been filed without making mandatory pre-deposit of the duty and or penalty in dispute as mandated in Section 35 F of the Central Excise Act, 1944 /Section 129E of the Customs Act,1962. 2. The above appeals came up for hearing as per the defect notices issued by the Registry to the appellants. The issue for consideration in all these cases being the same, they were heard together and are disposed by this common order. 3. In respect of the appellant M/s International Shippers and Traders, the Ld Counsel Hari Radhakrishnan submitted that the law relating to mandatory pre-deposit of 7.5% of the penalty imposed is not applicable to the present case as appellant s right of appeal has got crystallized when the lis arose. Therefore, the provisions of the un-amended Section 129E of the Customs Act, 1962 will apply. The appellant is taking this stand by placing relian .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... entral Excise Act, 1944 was made. None appeared for the appellant. A request for adjournment dated 31.08.2016 was filed seeking adjournment for at least one month to hear upon the issue of non-compliance of mandatory pre-deposit. We are not inclined to grant adjournment as the appeal along with stay petition seeking waiver of pre-deposit is seen filed as early as on 05.05.2015. The matter was therefore, taken up for disposal after perusal of records. 6. In respect of the appellant, M/s Sai Rayalaseema Paper Mills the Ld counsel Sri. Bharat Ram submitted that the appellant is unable to pay mandatory pre- deposit since they have been declared as a Sick Company under BIFR and hence facing acute financial crunch. 7. We have considered the oral and written submissions made in these matters. 8. In the first place, the, Single Bench judgment of the Hon ble High Court of Kerala in the Muthoot Finance Ltd case 2015(38) STR 1133 (ker) stands modified by the Division Bench of the same Court in 2016(42) STR 811(ker). Secondly, the judgment of the High Court of A.P. and Telangana in the case of K. Rama Mohana Rao Co. V UOI 2015(321) ELT (195) is only an interim and a specific .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Finance Ltd. V/s Union of India - 2015-TIOL-632-HC-KERALA-ST = 2015 (320) E.L.T 51 (Ker.). The Kerala High Court has referred to an interim order passed by the Andhra Pradesh High Court in K. Rama Mohanarao V/s Union of India-2015-TOIL-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 judgement 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 High Court which was relied upon in the judgement of the Kerala High Court is only an interim order. For these reasons, we hold that the petitioner would not be justified in urging that the amended provisions of Section 35F (1) of the Act would not apply merely on the ground that the notice to show cause was issued prior to the enforcement of Finance (No.2) Act, 2014. We find no merit in the constitutional challenge. The petition shall accordingly stand dismissed for the aforesaid reaso .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... of the appellate Authorities / Tribunals. We have actually come across several cases where the Tribunal has granted waiver of different percentages in cases of identical nature, without any rhyme or reason. In fact this Court is burdened with appeals both under Section 35G of the Central Excise Act and Section 130 of the Customs Act, against the orders of the Tribunal granting or refusing to grant waiver. Therefore, the amendment to the provision has actually taken away the possibility of an arbitrary exercise of power and along with it, the threat of multiplicity of proceedings even at the stage of waiver applications. Therefore, we are of the considered view that the writ petition in W.P. No. 13431 of 2015 seeking a declaration that the amended Section 35F of the Central Excise Act, 1944, is applicable only to show cause proceedings initiated on or after 6-8-2014 is liable to be dismissed. Accordingly it is dismissed. There will be no order as to costs. In so far as the writ appeal is concerned, the Order-in-Original was passed on 27-2-2015 and the assessee challenged it before this Court without exhausting the alternative remedy of appeal. But in the course of the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... nance 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 dismissal of the writ petition, any direction could have been issued as to how the interim application that might be subsequently filed should be decided by the appellate Tribunal. Secondly, the High Court appears to have proceeded on the basis that the interim order passed by the High Court of Telangana and Andhra Pradesh in K. Rama Mohanarao V/s. Union of India (supra) was consistent with the legal position that the institution of a suit carried with it an implication that all rights of appeal then in force are preserved to the parties. A demand of tax raised by way of 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 35F 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/s. Un .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... of the amended Section 129E of the Act, the Court concurs with the decision of the Allahabad High Court in Ganesh Yadav V/s. Union of India (supra) in the context of the identically worded Section 35F of the CE Act and holds that the amended Section 129E of the Act will apply to all appeals filed under Section 130 of the Act on or after 6 th August, 2014. In the present case, the Appellant deposited a sum of ₹ 4,95,532/- on 8th May 2015 which was admittedly not 7.5% of the demanded duty as confirmed by the order dated 10 th October 2014 by the Commissioner of Customs (Export). This had to necessarily result in the dismissal of its appeal by the CESTAT. No substantial question of law arises for determination. The appeal and the pending application are dismissed . 10. The ratio in Anjani Techno Plast case (supra) was reiterated by the Hon ble High Court of Delhi in Suvidha Signs Studios Pvt. Ltd. Vs UOI 2016 (336) ELT 274 (Del). The relevant portion is extracted as under: The petitioner having failed to comply with the statutory mandatory requirement of depositing the 7.5% of the demand of duty and penalty, the CESTAT was right in dismissing the petit .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates