2013 (11) TMI 240 - HC - Central Excise

Limitations on Writ Petitions Against CESTAT Interim Orders under Central Excise and Customs Acts

The court held that writ petitions are generally not maintainable against interim orders of CESTAT when statutory remedies exist. It applied the ... Appealability of interlocutory orders - pre-deposit (dispensation) application - right of appeal to High Court under Section 35G/Section 130 - interpretation of 'any'/'every' order - application of Raj Kumar Shivhare (FEMA) ratio to pari materia statutes - exclusivity of statutory remedy vs. writ jurisdiction under Article 226Appealability of interlocutory orders - pre-deposit (dispensation) application - right of appeal to High Court under Section 35G/Section 130 - interpretation of 'any'/'every' order - application of Raj Kumar Shivhare (FEMA) ratio to pari materia statutes - Whether orders of the Appellate Tribunal (CESTAT) passed on applications for dispensation of pre-deposit under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 are appealable to the High Court under Section 35G of the Central Excise Act or Section 130 of the Customs Act. - HELD THAT: - The Court held that appeals lie to the High Court against CESTAT orders on pre-deposit applications. Sub-section (2) of Section 35G (and the corresponding provision in Section 130) uses the phrase 'any order passed by the Appellate Tribunal,' which the Bench construed in light of the Supreme Court's decision in Raj Kumar Shivhare to mean all orders, including interlocutory orders. The legislature deliberately employed distinct language in sub-sections (1) and (2); sub-section (2) widens the scope by expressly permitting appeals against 'any order' of the Tribunal. There is no statutory bar excluding interim/pre-deposit orders from appeal. The Court further explained that whether a substantial question of law arises from an interlocutory order depends on the facts of each case, and the availability of an appellate remedy should ordinarily exclude resort to writ jurisdiction except in cases of lack of jurisdiction, breach of natural justice, or where the statute is otherwise ultra vires. The statutory pre-deposit regime is to be read conjunctively with the procedural form and requirement (Form E.A.-3 and Rule 6), which contemplate deposit or a specific application for dispensation; but the existence of short compliance timelines does not oust the right of appeal under the statutory provisions. [Paras 33, 41, 42, 53, 80]Orders of the CESTAT on applications for waiver/dispensation of pre-deposit under Section 35F/Section 129E are appealable to the High Court under Section 35G/Section 130.Exclusivity of statutory remedy vs. writ jurisdiction under Article 226 - maintainability of writ petitions - taxing statute construed literally - Whether writ petitions challenging CESTAT orders on pre-deposit are maintainable before the High Court when an appellate remedy under Section 35G/Section 130 is available. - HELD THAT: - Applying settled principles that taxing statutes are to be construed strictly and that where an effective statutory remedy exists writ jurisdiction will not ordinarily be exercised, the Court held writ petitions challenging pre-deposit orders are not maintainable. The Bench followed Raj Kumar Shivhare and subsequent Supreme Court authority emphasising that when a statutory appellate forum exists, litigants should ordinarily exhaust that remedy; Article 226 remains available only in limited circumstances (complete lack of jurisdiction, breach of natural justice, or vires challenge). Accordingly, writ petitions filed solely on the ground that no appellate remedy exists were dismissed as not maintainable, while preserving the petitioners' right to raise all grounds and substantial questions of law in the statutory appeal. The Court also directed a limited period of preservation of status quo to afford time to file appeals. [Paras 42, 71, 80, 81]Writ petitions challenging CESTAT pre-deposit orders are not maintainable; petitioners must pursue appeals under Section 35G/Section 130, subject to the limited exceptions applicable to writ jurisdiction.Final Conclusion: The Bench answered the reference by holding that orders of the CESTAT on applications for dispensation of pre-deposit under Section 35F/Section 129E are appealable to the High Court under Section 35G/Section 130; consequently the writ petitions before this Court challenging such interim orders are dismissed as not maintainable, with liberty to the petitioners to file statutory appeals and a direction to maintain status quo for three weeks to enable compliance with that liberty. Issues Involved:1. Maintainability of writ petitions against interim orders of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT).2. Applicability of the decision in Raj Kumar Shivhare's case to the Central Excise Act, 1944, and the Customs Act, 1962.3. Interpretation of Sections 35G of the Central Excise Act, 1944, and 130 of the Customs Act, 1962, regarding appeals against interim orders.Issue-wise Detailed Analysis:1. Maintainability of Writ Petitions Against Interim Orders of CESTAT:The core issue was whether writ petitions are maintainable against interim orders passed by CESTAT, specifically those concerning pre-deposit requirements. The Revenue contended that appeals under Section 35G of the Central Excise Act or Section 130 of the Customs Act are the appropriate remedies, referencing the Supreme Court decision in Raj Kumar Shivhare's case. The petitioners argued that writ petitions are maintainable, citing previous instances where High Courts entertained such petitions despite the availability of alternative remedies.The judgment clarified that writ petitions are generally not maintainable when an effective statutory remedy is available. The court emphasized that the legislative intent, as expressed in the statutory provisions, should be given effect without judicial interpretation that either widens or restricts the scope beyond what is clearly stated.2. Applicability of Raj Kumar Shivhare's Case:The petitioners contended that the decision in Raj Kumar Shivhare's case, which dealt with the Foreign Exchange Management Act (FEMA), 1999, should not be applied to the Central Excise Act and the Customs Act. They argued that the contexts and legislative intents of these enactments are different.However, the court found that the interpretation given by the Supreme Court to the phrase 'any order' in Raj Kumar Shivhare's case should be applied to similar phrases in the Central Excise Act and the Customs Act. The court noted that unless there is an express contrary intention in the statutes themselves, the interpretation of 'any order' to mean 'all orders' should be consistent across different enactments.3. Interpretation of Sections 35G of the Central Excise Act, 1944, and 130 of the Customs Act, 1962:The petitioners argued that Sections 35G and 130 only allow appeals against final orders and not interim orders. They claimed that the phrase 'every order passed in appeal by the Appellate Tribunal' should be interpreted to exclude interim orders.The court conducted a detailed analysis of the statutory provisions and found that the legislative intent was to allow appeals against 'any order passed by the Appellate Tribunal,' including interim orders. The court highlighted that the use of different phrases in subsections (1) and (2) of Sections 35G and 130 indicated a broader scope for appeals, encompassing both final and interim orders. The court emphasized that the statutory language was clear and unambiguous, and therefore, no further judicial interpretation was warranted.The court concluded that the appellate remedy under Sections 35G and 130 is available for any order passed by CESTAT, including interim orders concerning pre-deposit requirements. Consequently, the writ petitions were dismissed as not maintainable, with liberty granted to the petitioners to file appeals under the relevant statutory provisions. The court also directed the parties to maintain the status quo for three weeks to allow for the filing of appeals.