Pre-deposit requirement under Central Excise appeal law upheld as procedural and retrospectively applicable, with pending matters saved.

The amended pre-deposit regime under Section 35F of the Central Excise Act was treated as a procedural control on the exercise of the statutory right of appeal, not as an unreasonable restriction. It required a mandatory percentage deposit with a ceiling and replaced the earlier discretionary waiver regime without abolishing the appellate remedy. The amendment was also construed as operating retrospectively, so it applied to appeals filed after commencement even where the underlying lis had begun earlier, subject to the second proviso preserving pending stay applications and appeals already before the appellate authority. The circulars aligned with this regime were upheld and the writ petitions were dismissed.

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Issues: (i) Whether the amended pre-deposit requirement under Section 35F of the Central Excise Act, 1944 is an unreasonable condition affecting the right of appeal; (ii) Whether the amendment to Section 35F has retrospective operation and applies to appeals arising from lis commenced before its commencement.

Issue (i): Whether the amended pre-deposit requirement under Section 35F of the Central Excise Act, 1944 is an unreasonable condition affecting the right of appeal?

Analysis: The right to file an appeal under Sections 35 and 35B is substantive, but the requirement of deposit under Section 35F regulates the exercise of that right and operates in the field of procedure. The amended provision does not take away the appellate remedy; it only prescribes a mandatory percentage of pre-deposit with a ceiling amount, in place of the earlier discretionary waiver regime. Such a condition was held to be a valid legislative control on the appeal process and not an onerous or illusory restriction.

Conclusion: The amended pre-deposit requirement is valid and is not an unreasonable restriction; the condition operates in favour of Revenue.

Issue (ii): Whether the amendment to Section 35F has retrospective operation and applies to appeals arising from lis commenced before its commencement?

Analysis: The substitution of Section 35F was construed as a procedural amendment with retrospective operation, having regard to the language, object, and the second proviso. The second proviso was treated as a saving clause preserving the earlier regime only for stay applications and appeals already pending before the appellate authority on the commencement date. In all other cases, including where the lis commenced earlier but the appeal was filed later, the amended provision governs. Earlier authorities on vested rights of appeal were distinguished because they concerned substantive appellate rights and did not address the present statutory structure and saving clause.

Conclusion: The amended Section 35F applies retrospectively, except to matters saved by the second proviso, and the petitioners were required to comply with it.

Final Conclusion: The challenge to the amended pre-deposit regime failed, the circulars consistent with that regime were upheld, and the writ petitions were dismissed.

Ratio Decidendi: A statutory provision that prescribes the pre-deposit condition for entertaining an appeal is procedural, not substantive, and may operate retrospectively where the amending enactment shows a clear legislative intent and contains a saving clause for pending matters.

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