Court upholds validity of Section 35F amendment, deems pre-deposit procedural, applies retrospectively. Saving clause for pending cases. Circular guidelines valid.

M/s Hindustan Petroleum Corporation Ltd, Mr. VK Jain, Prestige Garden Constructions Pvt Ltd, Exora Business Parks Pvt Ltd, M/s Hewlett Packard India Sales Pvt Ltd Versus Union of India, Commissioner of Central Excise & Service Tax, The Deputy Registrar, Customs Excise And Service, Tax Appellate Tribunal, The Central Board of Excise And Customs

M/s Hindustan Petroleum Corporation Ltd, Mr. VK Jain, Prestige Garden Constructions Pvt Ltd, Exora Business Parks Pvt Ltd, M/s Hewlett Packard India Sales ... Issues Involved:
1. Validity of the amendment to Section 35F of the Central Excise Act, 1944.
2. Whether the amendment to Section 35F has a retrospective operation.
3. Impact of the amendment on the right of appeal under Sections 35 and 35B of the Act.
4. Interpretation and significance of the second proviso to the amended Section 35F.
5. Validity of the circulars dated 16/9/2014 and 4/10/2014.

Detailed Analysis:

1. Validity of the amendment to Section 35F of the Central Excise Act, 1944:
The petitioners contended that the amendment to Section 35F, which mandates a pre-deposit of 7.5% for the first appeal and 10% for the second appeal, violates Articles 14, 19(1)(g), and 265 of the Constitution of India. They argued that the amendment adversely affects their substantive right of appeal, as it removes the discretion previously vested in appellate authorities to waive or reduce the pre-deposit. The court, however, held that the requirement of pre-deposit is not an unreasonable condition and does not adversely affect the right of appeal. The court stated that the condition of pre-deposit is a procedural requirement meant to regulate the exercise of the right of appeal and ensure the enforcement of the order appealed against if the appeal is ultimately dismissed.

2. Whether the amendment to Section 35F has a retrospective operation:
The court held that the amendment to Section 35F has a retrospective operation, meaning it applies to all cases, irrespective of when the lis (dispute) commenced. The second proviso to the amended Section 35F, which states that the amendment does not apply to stay applications and appeals pending before any appellate authority filed prior to the commencement of the 2014 Act, was interpreted as a saving clause. This proviso ensures that the earlier provision of Section 35F applies to those cases where appeals were already filed and pending as on 6/8/2014. For all other cases, the amended Section 35F applies, indicating its retrospective effect.

3. Impact of the amendment on the right of appeal under Sections 35 and 35B of the Act:
The court clarified that Sections 35 and 35B, which provide the right to file an appeal, remain unaltered and intact. The right to file an appeal is a substantive right, but the conditions prescribed under Section 35F for making a pre-deposit are procedural. The amendment to Section 35F does not affect the substantive right of appeal but regulates the procedure for filing an appeal by mandating a pre-deposit. The court emphasized that the right to file an appeal under Sections 35 and 35B is not absolute but conditional upon compliance with Section 35F.

4. Interpretation and significance of the second proviso to the amended Section 35F:
The second proviso to the amended Section 35F was interpreted as a saving clause, ensuring that the earlier provision applies to appeals and stay applications pending as on 6/8/2014. The court held that this proviso is significant and distinguishes the amended provision from the provisions considered in earlier judgments such as Hoosein Kasam Dada. The second proviso indicates the retrospective operation of the amendment, as it applies the earlier provision only to pending cases, while the amended provision applies to all other cases.

5. Validity of the circulars dated 16/9/2014 and 4/10/2014:
The court upheld the validity of the circulars dated 16/9/2014 and 4/10/2014, which provided guidelines on the procedure and manner of making the pre-deposit as per the amended Section 35F. The circulars were found to be in consonance with the court's interpretation of the amendment and its retrospective operation.

Conclusion:
The court dismissed the writ petitions, holding that the amendment to Section 35F of the Central Excise Act, 1944, is valid and has a retrospective operation. The requirement of pre-deposit is a procedural condition that does not affect the substantive right of appeal. The second proviso to the amended Section 35F serves as a saving clause, applying the earlier provision to pending cases, while the amended provision applies to all other cases. The circulars dated 16/9/2014 and 4/10/2014 were also upheld.