2024 (12) TMI 523 - AT - Central Excise

Appeal dismissed for failing mandatory pre-deposit under section 35F Central Excise Act

Shri Surendra Kumar Purohit Versus Commissioner (Appeals), Central Excise and Central Goods and Service Tax, Jaipur

CESTAT dismissed the appeal for non-compliance with statutory pre-deposit requirements under section 35F of the Central Excise Act. The tribunal held that ... Maintainability of petition - non-compliance of the statutory requirement of making the pre-deposit - failure to remove defects in the appeal - HELD THAT:- It would be seen from a bare perusal of section 35F of the Central Excise that after August 06, 2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 35F on August 06, 2014 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue. The Supreme Court in Narayan Chandra Ghosh vs. UCO Bank and Others [2011 (3) TMI 1478 - SUPREME COURT], examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statute confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. The appellant has not made the pre-deposit. In view of the aforesaid decisions of the Supreme Court, the Delhi High Court and the Madhya Pradesh High Court, it is not possible to permit the appellant to maintain the appeal without making the required pre-deposit. Appeal dismissed. Issues Involved:1. Non-compliance with the statutory requirement of pre-deposit under Section 35F of the Central Excise Act.2. Consequences of failure to remove defects in the appeal.3. Legal precedents regarding the mandatory nature of pre-deposit requirements.Issue-wise Detailed Analysis:1. Non-compliance with the statutory requirement of pre-deposit under Section 35F of the Central Excise Act:The core issue in this judgment revolves around the appellant's failure to comply with the statutory requirement of making a pre-deposit as mandated by Section 35F of the Central Excise Act. This section, as amended on August 06, 2014, stipulates that an appellant must deposit a certain percentage of the duty or penalty before an appeal can be entertained. Specifically, the appellant is required to deposit 7.5% of the duty or penalty in dispute. The Tribunal emphasized that this requirement is mandatory and neither the Tribunal nor the Commissioner (Appeals) has the power to waive this requirement, which was possible under the pre-amendment regime if undue hardship was demonstrated.2. Consequences of failure to remove defects in the appeal:The appeal was initially filed with seven defects, including the non-compliance with the pre-deposit requirement. Despite several opportunities and notices given to the appellant to rectify these defects, no action was taken, and no representative appeared on behalf of the appellant. The Tribunal noted that the appellant had been given multiple chances to comply with the procedural requirements and remove the defects, yet failed to do so. The persistence of these defects, particularly the failure to make the pre-deposit, resulted in the dismissal of the appeal.3. Legal precedents regarding the mandatory nature of pre-deposit requirements:The judgment extensively references various legal precedents to underscore the mandatory nature of the pre-deposit requirement. The Supreme Court's decision in Narayan Chandra Ghosh vs. UCO Bank and Others was cited, which held that statutory conditions for appeal, such as pre-deposit, are mandatory and cannot be waived by the Tribunal. The Supreme Court reiterated that such conditions are not considered onerous or unreasonable restrictions on the right to appeal. Similarly, the Delhi High Court in Dish TV India Limited vs. Union of India & Ors. and other cases highlighted that courts cannot waive statutory pre-deposit requirements, as the law itself provides significant relief by reducing the deposit amount compared to previous regimes. The Madhya Pradesh High Court in Ankit Mehta v/s Commissioner, CGST Indore also dismissed a petition due to non-compliance with the pre-deposit requirement, reinforcing that neither the Tribunal nor the courts have the authority to waive or reduce the pre-deposit.Conclusion:The Tribunal concluded that due to the appellant's failure to make the mandatory pre-deposit and remove other defects, the appeal could not be maintained. The judgment reflects a strict adherence to statutory requirements and judicial precedents, emphasizing that compliance with pre-deposit conditions is a prerequisite for the entertainment of an appeal. Consequently, the appeal was dismissed.