TMI Blog2017 (4) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... If the legislators have any intention not to collect 7.5% in cases where the proceedings have been initiated prior to enactment of Finance Bill, 2014, the same would have been incorporated in amended Section 35F explicitly. In the absence of such explicit provision, there is no scope for interpretation that the 7.5% is required only in cases wherein the proceedings have been initiated on or after the amended section 35F in the Finance Bill, 2014. Reliance placed in the case of Nimbus Communications Limited, Versus Commissioner of Service Tax, Service Tax-VI, & Others [2016 (8) TMI 451 - BOMBAY HIGH COURT], where it was held 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. The applicant is required to make a pre-deposit of 7.5% of the adjudged dues which the applicant failed to do so - the appeal is not maintainable for want of pre-deposit in terms of Section 35F. Appeal dismissed being non-maintainable. - E/COD/92127/17E/MA(Ors)/92128 & 92129/17, E/85196/17 - A/86487/17/EB, M/86488-8698 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del) * Nimbus Communciations Ltd. 2016 (44) STR 578(Bom) 4. We have carefully considered the submission made by both sides. We find that this issue has come up earlier also and this tribunal in the decision cited by the ld. AR taken a consistent view that mandatory pre-deposit is applicable in those cases where the proceedings have been initiated prior to enactment of the amendment to Section 35F by which the 7.5% pre-deposit was made mandatory. The amendment to Section 35F is reproduced below:- SECTION 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 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) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court is reproduced below:- 10.For properly appreciating the rival contentions, we would make a reference to the power and conferred in the Tribunal vide Section 35F as it stood prior to its amendment and post amendment, which read thus : SECTION 35F PRIOR TO AMENDMENT : SECTION 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 the 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 the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 11.By the unamended provision it is apparent that where in any appeal under the Chapter in which Section 35F falls, the decision or order appealed against relates to any duty demanded in respect of the goods which are not under the control of the 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. However, by the proviso which is the Proviso No. 1, the Commissioner (Appeals) or the Appellate Tribunal has discretion and if he or it is of the opinion that the demand of duty or penalty would cause hardship, then, he or it may dispense with such deposit subject to any conditions as he or it may deem fit to impose so as to safeguard the interest of the Revenue. Then, by the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 14.The three judgments that Mr. Dada relies upon, are commencing with an interim order passed by the High Court of Punjab and Haryana at Chandigarh in Super Threading (supra). There, on a writ petition, the argument was that the requirement of pre-deposit in terms of the instructions to deposit seven and a half per cent of the duty and/or penalty should not be entertained. The petitioner before the High Court of Punjab Haryana relied upon an order passed by a learned Single Judge of the Kerala High Court in the case of Muthoot Finance Ltd. v. Union of India - 2015 (320) E.L.T. 51 (Ker.) = 2015 (38) S.T.R. 1133 (Ker.). The High Court of Punjab Haryana did not assign any independent reasons, but following this view of the Kerala High Court, directed that the appeal shall not be treated as not maintainable on account of the failure to deposit the amounts as per amended Section 35F. The Court did not explain the ambit and scope of this provision. 15.In Muthoot Finance, the petitioner before the Single Judge of the High Court of Kerala at Ernakulam challenged an order of confirmation of demand of the service tax and penalty. The petitioner was engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resorted to that is rendered illusory by a mandatory requirement of pre deposit of seven and a half per cent and, therefore, a declaration was claimed that such a mandatory prescription is ultra vires or unconstitutional. 19.The Division Bench, speaking through the then Hon ble Chief Justice Dr. D.Y. Chandrachud, took up for consideration the challenge. It referred to all the judgments including the one which have been relied upon before us. The Allahabad High Court in Paragraphs 9 and 10 considered this larger challenge and after referring to the judgments, some of which have been relied upon by Mr. Dada, held 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 proceeding and not by the law that prevails at the date of the decision or on the date of the filing of an appeal. Moreover, the vested right of an appeal can be taken aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Section 35F of the Act. 20. The intendment of Section 35F of the Act is further clarified by the second proviso which stipulates that the provisions of the section shall not apply to stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act, 2014. The second proviso is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F(1) of the Act as amended only in the case 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 file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the High Court of Madras in Dream Castle (supra), with respect, is also in consonance with the statutory prescription and the intent. It has referred to all the decisions in the field and the rival contentions. The Division Bench of the Allahabad High Court and all other judgments, including of the Kerala High Court have been extensively referred to. The independent reasoning of the Division Bench of the High Court of Madras is, with respect, rightly construing and interpreting the statutory provision. As held by the Division Bench of the High Court of Madras, the substantive provision Section 35F after its amendment, is not capable of any other interpretation. Though the second proviso was referred, but the Division Bench independent thereof, agreed with the contention of the Revenue which is that the amended provision would have to be applied to all such appeals as falling within the second proviso. 23. We also arrive at the same conclusion and, therefore, it is not necessary for us to reproduce each and every paragraph from the judgment of the High Court of Madras. Once we broadly agree with Ms. Cardozo that the prescription as is carved out by Section 35F would apply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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