2013 (5) TMI 656 - HC - Central Excise

Inconsistency in Appealability of CESTAT Orders Raises Questions on Pre-Deposit Requirements

The judgment highlighted the inconsistency in the treatment of appealability of interlocutory orders by different High Courts regarding pre-deposit of ... Stay order passed by the CESTAT - undue hardship and prima facie case - the question that has to be considered is whether an order passed by the CESTAT in terms of Section 35-F of the Excise Act or Section 129-E of the Customs Act would be an order against which an appeal would lie. - held that:- there is enough confusion in different Courts as to how such an order should be dealt with. There has to be a clarity to a person approaching this Court as to which is the correct forum. There cannot be an element of doubt with regard to the forum to which a person is entitled to approach under the statute. - matter needs to be referred to larger bench. Issues Involved:1. Whether writ petitions challenging interlocutory orders of the CESTAT regarding pre-deposit of duty/penalty are maintainable under Article 226 of the Constitution of India.2. Whether appeals lie against interlocutory orders of the CESTAT under Section 35-G of the Central Excise Act, 1944, and Section 130 of the Customs Act, 1962.Detailed Analysis:1. Maintainability of Writ Petitions:The petitioners challenged the interlocutory orders passed by the CESTAT concerning pre-deposit of duty/penalty, arguing that undue hardship and prima facie cases were not considered by the Tribunal. They contended that the orders under Section 35-F of the Excise Act and Section 129-E of the Customs Act are interlocutory and not final, thus making writ petitions under Article 226 maintainable. The Revenue opposed this, citing the Supreme Court's decision in Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement, which clarified that appeals can be filed to the High Court from 'any decision or order' of the Appellate Tribunal on a question of law.2. Appealability of Interlocutory Orders:The judgment highlighted the inconsistency in how different High Courts have treated the appealability of interlocutory orders passed by the CESTAT. Various High Courts have given divergent rulings:- The Bombay High Court in Orange City Alloys Pvt. Ltd. v. Commissioner of Customs and Central Excise admitted appeals against CESTAT orders on pre-deposit, formulating substantial questions of law.- In Indoworth India Ltd. v. CESTAT, Mumbai, the Bombay High Court declined to entertain a writ petition, holding that an appeal would lie under Section 35-G of the Excise Act.- The Delhi High Court in Mukesh Garg v. Commissioner of Customs and Central Excise entertained appeals against CESTAT orders on pre-deposit and modified the orders.- The Karnataka High Court in Commissioner of Central Excise v. HML Agencies (P) Ltd. dismissed a writ petition challenging a CESTAT order on pre-deposit on merits.- The Kerala High Court in Mohd. Fariz and Co. v. Commissioner of Customs held that an order rejecting an appeal after dismissing an application for condonation of delay is not appealable under Section 130 of the Customs Act.- The Bombay High Court in Videocon Industries Ltd. v. Commissioner of Customs held that there is no bar for the Court to entertain an appeal under Section 130 of the Customs Act against an order of pre-deposit.3. Analysis of Statutory Provisions:The judgment examined the statutory provisions of FEMA, 1999, the Excise Act, and the Customs Act. Section 35 of FEMA allows for appeals against any decision or order of the Appellate Tribunal, whereas Sections 35-G of the Excise Act and 130 of the Customs Act provide for appeals against orders passed in appeal by the Appellate Tribunal. The distinction between interlocutory orders under Section 35-F of the Excise Act or Section 129-E of the Customs Act and final orders under Section 35-C of the Excise Act or Section 129-B of the Customs Act was emphasized. The interlocutory orders consider only prima facie cases and undue hardship, not the merits of the appeal.4. Need for Clarity:Given the conflicting decisions from various High Courts, the judgment underscored the need for clarity on whether an appeal would lie against the CESTAT's interlocutory orders under Section 35-F of the Excise Act or Section 129-E of the Customs Act. The judgment noted that the decision in Raj Kumar Shivhare might not apply to orders under these sections due to differences in statutory provisions.Conclusion:The judgment directed the Registry to place the matter before the Hon'ble Chief Justice for referring the issue to an appropriate Bench. The Larger Bench is to decide whether the order passed by the CESTAT in terms of Section 35-F of the Excise Act or Section 129-E of the Customs Act is appealable under Section 35-G of the Excise Act or Section 130 of the Customs Act.