2016 (11) TMI 484 - AT - Service Tax

Deposit Rule Compliance Essential in Tax Appeals: CESTAT Decision

The Appellate Tribunal CESTAT AHMEDABAD ruled that compliance with Section 35F of the Central Excise Act, 1944 is mandatory for entertaining an appeal. ... Pre-deposit - Section 35F of Central Excise Act, 1944 - interpretation of statute - Held that: - reliance placed on the decision of the case of Greatship(India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai-I [2015 (4) TMI 1006 - BOMBAY HIGH COURT] where it was held that the Court interpreting the statute should not proceed to add the words which are not found in the statute. It is equally settled that if the person sought to be taxed comes within the letter of the law he must be taxed, however, great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. It is further settled that an equitable construction, is not admissible in a taxing statute, where the Courts can simply adhere to the words of the statute. It is equally settled that a taxing statute is required to be strictly construed. Common sense approach, equity, logic, ethics and morality have no role to play while interpreting the taxing statute. It is equally settled that nothing is to be read in, nothing is to be implied and one is required to look fairly at the language used and nothing more and nothing less. We do not find substance in the argument that since the confirmed demand cannot survive the scrutiny of law being contrary to the settled principle of law, the Appeal should be entertained and heard on merit without compliance of Sec. 35F of CEA,1944 as applicable to service Tax Appeals. In the result, the appeal is not entertained. Issues involved: Compliance with Section 35F of Central Excise Act, 1944 for entertaining appeal.In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the issue revolved around the compliance with Section 35F of the Central Excise Act, 1944 for entertaining an appeal. The appeal was filed against an order passed by the Commissioner of Central Excise, Customs, and Service Tax. The appellant failed to deposit the requisite amount of 7.5% of the Service Tax confirmed at the time of filing the appeal, as mandated by Section 35F. The Revenue argued that non-compliance with this provision rendered the appeal non-entertainable. However, the appellant contended that the impugned order was contrary to settled law. The tribunal examined Section 35F, which clearly mandated the deposit of a percentage of duty or penalty before entertaining an appeal, and rejected the argument that the appellant was not required to comply with this provision when the service tax and penalty were in dispute. The tribunal cited the principle of literal interpretation in taxing statutes and held that compliance with statutory provisions was necessary. Consequently, the appeal was not entertained, and the matter was disposed of.This judgment highlights the importance of complying with statutory provisions, especially in tax matters. It emphasizes the need for strict adherence to the wording of the law, without room for equitable constructions in taxing statutes. The tribunal's decision underscores the significance of following procedural requirements, such as depositing the specified amount before appealing a tax assessment or penalty. Compliance with legal provisions is crucial for the proper adjudication of appeals and upholding the integrity of the legal system.