Division Bench Upholds Amended Section 35F Requirement for Excise Act Appeals

The Division Bench upheld the validity of the amended Section 35F of the Central Excise Act, 1944, requiring payment of 7.5% of the duty or penalty in dispute as a condition for appeal. The court ruled that the amendment applies to appeals filed post-amendment, even if the lis commenced earlier. Citing legal precedents, the court emphasized that the right of appeal is vested at the initiation of the lis and cannot be retrospectively taken away by legislative changes. The appeals challenging the Customs, Excise and Service Tax Appellate Tribunal orders were dismissed without costs based on the binding precedent set by Nimbus Communication Limited case.

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Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal based on non-compliance of Section 35F of Central Excise Act, 1944 post amendment.

Analysis:
The judgment involves two appeals filed by the assessee challenging the orders of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) based on non-compliance with Section 35F of the Central Excise Act, 1944. The appeals were filed after 1st October, 2014, following an amendment to Section 35F. The Senior Counsel for the appellant argued that the right to avail statutory remedies vests at the initiation of the proceeding and cannot be retrospectively taken away by legislative amendments. He cited the Division Bench decision in Nimbus Communication Limited vs. Commissioner of Service Tax, which upheld the validity of the amended Section 35F and its application to appeals filed post the amendment, regardless of the commencement date of the lis. The counsel also referenced the Apex Court's decision in Hoosein Kasam Dada (India) Limited vs. State of Madhya Pradesh, emphasizing that vested rights cannot be abrogated by retrospective amendments. Additionally, various other legal precedents were cited to support the argument that the appellant's right to appeal should not be curtailed due to non-compliance with the amended Section 35F.

The Division Bench considered the principles laid down in Garikapatti Veeraya vs. N. Subbiah Choudhary, stating that the right of appeal is vested at the initiation of the lis, a view consistently upheld by the Apex Court. The Division Bench upheld the validity of the amended Section 35F, emphasizing that it does not render the right of appeal illusory. The decision in Hoosein Kasam Dada was referred to, where substantial restrictions on the right of appeal were placed by an amendment, requiring the deposit of the entire assessed amount as a condition for admission of the appeal. The Apex Court's decision in Ramesh Singh dealt with compensation claims under the Motor Vehicles Act, emphasizing that compliance with the provisions of the new Act is not required for appeals arising under the repealed Act. The Division Bench's decision in Vaibhav Steel Corporation did not directly address the issue at hand.

The Apex Court's decision in K. Raveendranathan Nair highlighted substantial enhancements in court fees for appeals, stating that the applicable court fee is determined by the date of the cause of action. The amended Section 35F mandates the payment of 7.5% of the duty or penalty in dispute as a condition for appeal, compared to the previous requirement of depositing the entire demanded amount. The Division Bench upheld the constitutional validity of the amended Section 35F, applying it to appeals filed post the amendment, even if the lis commenced earlier. The judgment concluded that the Division Bench's decision in Nimbus Communication is binding and no substantial question of law arises, leading to the dismissal of the appeals without costs.

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