2023 (8) TMI 1371 - AT - Central Excise

Tribunal Enforces Pre-Deposit Rule for Appeals u/s 35F of Central Excise Act; Non-Compliance Leads to Dismissal.

The Tribunal directed the appellant to comply with the mandatory pre-deposit requirement under Section 35F of the Central Excise Act, 1944, within four ... Maintainability of appeal - failure to make pre-deposit as required Section 35F of Central Excise Act, 1944 readwith Section 83 of the Finance Act, 1994 - HELD THAT:- This issue is no more res-integra and has been settled by the Larger Bench of the Tribunal as well as by the Hon’ble High Court of Bombay and Hon’ble High Court of Madras as well as Hon’ble Punjab and Haryana High Court. The jurisdictional High Court in the case of M/S G.D. GOENKA WORLD INSTITUTE, SANJAY AGGARWAL, M/S IL& FS RAIL LIMITED, M/S AUTO DYNAMIC CORPORATION, M/S OCEANIC CONSULTANTS PRIVATE LIMITED, M/S G.D. GOENKA WORLD INSTITUTE (UNIT OF GDG EDUCATION TRUST) , TARUN MONGA AND M/S SWIFT FUNDAMENTAL RESEARCH AND EDUCATION SOCIETY VERSUS UNION OF INDIA AND OTHERS AND COMMISSIONER OF CENTRAL EXCISE COMMISSIONERATE, LUDHIANA AND ANOTHER [2018 (11) TMI 522 - PUNJAB AND HARYANA HIGH COURT] has held that there would be no escape from pre-deposit as the Tribunal lacks the power to entertain the appeal without it. If we have to lend any other interpretation, it would defeat the legislative intent which is so clearly visible from the provisions of Section 35F of the Act and in fact, there would have been no necessity of amendment and Section 129E in its unamended form need not have been tinkered with. The division bench of the Hon’ble Madras High Court in the case of M/S DREAM CASTLE, REP. BY ITS PROPRIETOR SRI S. VENKATARAMANAN VERSUS UNION OF INDIA, MINISTRY OF FINANCE, REP. BY ITS SECRETARY, DEPARTMENT OF REVENUE, THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI - III COMMISSIONERATE, CHENNAI, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH-CHENNAI M/S. FIFTH AVENUE SOURCING (P) LIMITED [2016 (5) TMI 672 - MADRAS HIGH COURT] has held that Therefore, it is well settled that the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory. Thus, the appellant has to comply with the mandatory pre-deposit and accordingly, it is directed that the appellant to comply with Section 35F within four weeks from today failing which his appeal will be dismissed for non-compliance of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944. Issues involved:The judgment deals with the issue of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994.Summary:Issue 1: Preliminary objection regarding mandatory pre-depositThe Registry raised a preliminary objection that the appellant did not make the required pre-deposit as per Section 35F of the Central Excise Act, 1944. The appellant argued for the appeal to proceed without the mandatory pre-deposit, citing vested appeal rights and the Tribunal's power to condone the pre-deposit requirement. The Departmental Representative (DR) contended that the Tribunal cannot entertain an appeal without the mandatory pre-deposit, as per the amended Section 35F. Various decisions were cited to support both arguments. The Tribunal found that the issue had been settled by previous decisions of the Larger Bench of the Tribunal and various High Courts, upholding the requirement of mandatory pre-deposit.Issue 2: Judicial interpretations and decisionsThe judgment referred to decisions by the Hon'ble High Courts of Punjab and Haryana, Bombay, and Madras, along with the Larger Bench of the Tribunal. The High Courts upheld the legislative intent behind the mandatory pre-deposit requirement, emphasizing that the Tribunal lacks the power to entertain an appeal without it. The High Courts also considered the constitutionality of the provision post-amendment and concluded that the requirement does not render the vested right of appeal illusory. The Division Bench of the Madras High Court highlighted that the legislature can impose conditions for the right of appeal as long as they are not unreasonable.Decision:The Tribunal directed the appellant to comply with the mandatory pre-deposit under Section 35F within four weeks, failing which the appeal would be dismissed for non-compliance. The judgment emphasized the settled nature of the issue and the legal requirement for the pre-deposit, in line with previous judicial interpretations and decisions.(Separate Judgment delivered by the Judges: No)