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2019 (8) TMI 676

..... D THAT:- Section 35F of the Act, as it earlier stood, invested the Tribunal with the discretion to dispense with the requirement of pre-deposit, if it was of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, however, subject to such conditions as the Tribunal may deem fit to impose so as to safeguard the interests of the revenue. However, Section 35F of the Act, amended vide the Finance (No.2) Act, 2014, which came into force w.e.f. 01.04.2014, has done away with that discretion - Section 35F(i) of the Act provides that unless the appellant has deposited 7.5% of the duty in case where the 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, the Tribunal or the Commissioner (Appeals), as the case may be, appeal shall not be entertained. Legislative mandate contained in Section 35F of the Act is intended to safeguard the interest of the revenue as the discretion provided in the earlier unamended Section 35F of the Act vested in the Tribunal gave rise to enormous c .....

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..... learly held that the High Court under Article 226 of the Constitution is vested with the jurisdiction to dispense with the requirement of predeposit in an appropriate case and the power of the Court under Article 226 of the Constitution is not taken away. Even the amended Section 35F of the Central Excise Act, 1944 (for short the Act ) has not abridged the power of the High Court under Article 226 of the Constitution. Learned counsel relied upon judgment of Delhi High Court in Manoj Kumar Jha Vs. Directorate of Revenue Intelligence, WP (C) 3392/2018, CM APPL. 13411/2018 decided on 03.12.2018 and submitted that the Division Bench of Delhi High Court in that case observed that in view of the material on record, the petitioner therein appeared to be man of very limited means and directed waiver of the requirement of pre-deposit, however, with the further direction to the petitioner therein to furnish a bond and also provide reasonable security having regard to list of immovable properties produced before the Court. It is argued that the appellant has already, in terms of order dated 06.03.2019 passed by this Court, deposited 50% of the predeposit amount and therefore, if waiver of ent .....

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..... ssioner of Service Tax, Service Tax-VI, Mumbai & Others, 2016 (44) S.T.R. 578 (Bom.); judgment of Allahabad High Court in Cyquator Media Services P. Ltd. Vs. Union of India & Others, 2018 (10) G.S.T.L. 297. We have given our anxious consideration to rival submissions and carefully perused the material on record. Section 35F of the Act, as it earlier stood, invested the Tribunal with the discretion to dispense with the requirement of pre-deposit, if it was of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, however, subject to such conditions as the Tribunal may deem fit to impose so as to safeguard the interests of the revenue. However, Section 35F of the Act, amended vide the Finance (No.2) Act, 2014, which came into force w.e.f. 01.04.2014, has done away with that discretion. Section 35F now in the present form stands as under: 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 ha .....

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..... Corporation (supra) while dealing with this aspect of the matter in para 9 and 10 held as under: 9. Under Section 35F of the CE Act as it stood prior to 6th August, 2014, a discretion was available to the CESTAT to consider the financial hardship and accordingly determine the pre-deposit amount. That discretion has been consciously sought to be curtailed and thus an amendment was made to Section 35F of CE Act requiring making of a pre-deposit of 7.5% in all cases subject to an upper cap of ₹ 10 crores. A direction, therefore, to the CESTAT that is should waive the pre-deposit would be contrary to the express legislative intent expressed in the amended Section 35F with effect from 6th August, 2014. 10. While, the jurisdiction of the High Court under Article 226 of the Constitution to grant relief notwithstanding the amended Section 35F cannot possibly be taken away, the Court is of the view that the said power should be used in rare and deserving cases where a clear justification is made out for such interference. Having heard the submissions of Mr. Datta and having perused the adjudication order, the Court is not persuaded to exercise its powers under Article 226 to direct t .....

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