TMI Blog2020 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... n Chand Jaiswal are the Directors of the petitioner Company Makers Casting Pvt. Ltd. 2. All these petitioners are aggrieved by the order dated 27.01.2020 passed by the Customs, Excise and Service Tax Appellate Tribunal (in short CESTAT ), Kolkata, whereunder appeal filed by the petitioners being Defect Memo Nos. D/MA (ROA)-77517 of 2019 D/76041 of 2019, D/MA (ROA)-77526 of 2019 D/76042 of 2019 and D/MA(ROA)-77527 of 2019 D/76043 of 2019, have been dismissed on the sole ground of non-compliance of pre-deposit under section 35F of Central Excise Act, 1944 (In short C.E.A ). Petitioners have further sought a direction upon the CESAT, Kolkata to hear and decide their appeal on its own merit without insisting upon pre-deposit, as stipulated under section 35F of C.E.A. 3. Petitioner s claim relates to waiver of pre-deposit under the amended section 35F of C.E.A. Both the pre-amended and amended Section 35F are extracted hereunder. Pre-amended section 35-F reads as under: 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 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 Central Credit Rules, 2002 or the Cenvat Credit Rules, 2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Section 35-F to prefer an application for waiver of deposit because Statute has already waived 92.5% or 90% of the duty demanded or penalty levied which is to be deposited with a maximum cap of ₹ 10.00 crores. 5. Special Leave Petition preferred by the petitioners against the judgment has been dismissed in limine by the Apex Court. Similar view has been taken by the other High Courts also on the validity of the amended Section 35-F of the Act of 1944. 6. In this legal background, the factual matrix of the case of the petitioners is briefly stated hereunder: The petitioner Company is engaged in manufacturing of M.S. Ingots falling under Chapter 72 of the first Schedule to the Central Excise Tariff Act, 1985 and also procuring raw materials required for manufacture of sponge iron, pig iron, scrap, coal, etc. for the use in the manufacturing of this M.S. Ingot. On the basis of search conducted by the officials of Central Excise Department on 04.12.2015 in the petitioner Company and investigation, a show-cause notice was issued on 21.04.2016 upon it under section 11A(4) of C.E.A and also for the Central Excise Duty along with education cess and secondary and higher se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 930/-, ₹ 7,50,000/- and ₹ 15,00,000/- respectively. In effect, the total amount of ₹ 72,99,930/- would be required to be deposited by the appellant Gyan Chand Jaiswal who is not in such a financial position to make pre-deposit of such amount in all the three appeals. (iii) Appellants are facing financial crisis due to drop in sale and economic slowdown in the market. They had lost reputation in business circle due to false allegation and supply market has diminished. (iv) Reliance was placed upon decision of Delhi High Court in the case of Pioneer Corporation Versus Union of India [2016 (340) ELT 63 (Del.) in support of the submission that under writ jurisdiction, High Court can exercise discretion and reduce the pre-deposit in rare and deserving cases, notwithstanding the amendment made under Section 35F of C.E.A. 8. It also pleaded that they had a prima facie case which should have been heard on merits since the impugned order was passed after more than nine months from the date of last personal hearing. Moreover, Panch witnesses Bir Karmakar and Bhima Lohar were interested Panch witnesses who have been routinely used as witnesses by the investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not maintainable as has been categorically held by the Coordinate Bench of this Court in the case of Sri Satya Nand Jha (Supra). On being specifically asked, learned counsel for the petitioners Mr. Gadodia referred to the prayer no. ii in the writ petitions which in our opinion, is only consequential to the prayer no. 1 i.e. for a direction upon the learned CESTAT to hear and decide the appeal on its own merit without insisting upon pre-deposit. The instant batch of writ petitions therefore appear to suffer from a fundamental defect as no such prayer to invoke extraordinary jurisdiction of this Court for waiver of mandatory pre-deposit under section 35-F of C.E.A has been made. 12. We now advert to the second issue, whether any exceptional grounds of undue hardship have been made out by the petitioners to seek waiver of the mandatory pre-deposit in preferring the appeal before the learned CESTAT, Kolkata? Section 35-F, as quoted above, regulates the right to appeal under section 35 and 35-B and is conditional upon making pre-deposit under Section 35-F. Therefore, there would be no appeal in the eye of law in absence of such pre-deposit under the amended Section 35-F. We have cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (Supra), para-7 8 thereof. A perusal of the judgment of Delhi High Court in Pioneer Corporation (Supra), on the other hand, indicates that the plea of waiver was raised before the Writ Court in view of financial hardship of the Company. Moreover, the grounds pleaded before the learned CESTAT and relied upon before this Court are bereft of any substance to establish that the petitioner Company and its two Directors suffered from such undue hardship which merits waiver of pre-deposit. 15. Learned counsel for the Respondent Revenue has also opposed the prayer for the same reason. It is the firm case of the Revenue that application for waiver of pre-deposit under section 35-F of C.E.A was not maintainable before the learned CESTAT. It has been further argued that no exceptional ground to constitute undue hardship have either been made out on the part of the petitioners for seeking waiver of such pre-deposit. 16. Having considered the submissions of the parties and the facts and circumstances noted above in the light of legal position, we do not find that petitioners have been able to make out any exceptional grounds of undue hardship for waiver of mandatory pre-deposit under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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