Pre-deposit requirement held prospective, preserving the vested right of appeal for proceedings begun before the amendment.

A statutory amendment introducing a mandatory 7.5% pre-deposit for service tax appeals was held to operate prospectively and not to apply where proceedings had commenced before the amendment. The right of appeal was treated as a vested right accruing when the lis began, so the appellate remedy remained governed by the law in force at that time. Because no appeal or stay application was pending before the amendment took effect, the amended pre-deposit condition did not apply. The appellant was therefore entitled to file the appeal before the Tribunal without making the pre-deposit.

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Issues: Whether, in an appeal against service tax demand arising from proceedings commenced before the 2014 amendment, the appellant is required to make the pre-deposit of 7.5% under Section 35F of the Finance Act, 1994.

Analysis: The amendment introducing mandatory pre-deposit was held to be prospective. The relevant right of appeal was treated as a vested right that accrues when proceedings are initiated, and not when the appellate remedy is later pursued. Since the lis had commenced before the amendment came into force and no appeal or stay application was pending prior to the amendment, the amended pre-deposit condition was held inapplicable to the petitioner's appellate remedy.

Conclusion: The petitioner was entitled to file the appeal before the Tribunal without making the 7.5% pre-deposit.

Ratio Decidendi: A statutory amendment imposing a pre-deposit requirement does not apply retrospectively to proceedings in which the right of appeal had already vested before the amendment, and the appeal must be governed by the law in force on the date the proceedings commenced.

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