2025 (2) TMI 1113 - HC - Service Tax

Calcutta HC upholds retrospective application of amended Section 35F pre-deposit requirements despite earlier show cause notices

M/s. Perfect Technologies Versus Commissioner Of Central Excise & Service Tax, Siliguri.

Calcutta HC dismissed the appeal challenging the Tribunal's order which rejected the assessee's appeal for non-compliance with amended Section 35F of the ... Dismissal of appeal on the ground that appellant/assessee has not complied with the amended provision of Section 35F as applicable to Service tax matters by virtue of Section 83 of the Finance Act, 1994 - HELD THAT:- As could be seen from the impugned order passed by the learned Tribunal dated 13.05.2015, the appeal filed by the assessee on 15.11.2014 challenging the order-in-original dated 9.12.2009 passed by the Commissioner of Central Excise and Service Tax, Siliguri Commissionerate was dismissed on the ground that appellant/assessee has not complied with the amended provision of Section 35F as applicable to Service tax matters by virtue of Section 83 of the Finance Act, 1994. The learned Tribunal while dismissing the appeal for non-compliance of the statutory requirement under Section 35F of the Central Excise Act, relied upon two decisions of the Co-ordinate Bench of the Tribunal in the case of AI Champdani Industries Murlidhar Ratanlal Exports Limited VS. CCE [2015 (2) TMI 421 - CESTAT KOLKATA]. The contention of the appellant/assessee is that the appellant’s right to file an appeal continues to be governed by the appellate provisions of the Central Excise Act and as they existed on the date of the issuance of the show cause notice dated 25.09.2008, 19.03.2009 and 10.08.2009 and the provisions of Section 35F substituted with effect from August 06, 2015 has no application to the case of the assessee. This issue is no longer res integra and has been settled in the decision Hindustan Petroleum Corporation Ltd. Vs. UOI, [2015 (11) TMI 959 - KARNATAKA HIGH COURT] High Court, Karnataka High Court – Central Excise. Among several other issues which were considered in the said matter the issue as to whether the amended provisions of Section 35F would have retrospective operation was also considered and it was held 'all cases not covered under the second proviso, the main amendment and main amended Section 35F would apply irrespective of as to when the lis has commenced. The date on which the lis has commenced in each case has no bearing on the amendment as it has retrospective effect and even if the lis has commenced prior to the date of amendment and it had not been filed on that date, even in such a situation the amended Section 35F would apply and a pre-deposit as per amended provision would have to be made.' Conclusion - Section 35F of the Act has retrospective operation and applies to all cases except those covered under the second proviso. The substantial questions of law which were admitted in this appeal are answered against the appellant/assessee and the appeal stands dismissed. The issues presented and considered in the judgment are as follows:1. Whether the appellant's right of appeal continues to be governed by the appellate provisions of the Central Excise Act, 1944, or the provisions of Section 35F substituted with effect from August 6, 2014 applyRs. 2. Whether the Tribunal was justified in dismissing the appellant's appeal for non-compliance with the provisions of Section 35F of the Central Excise Act, 1944Rs.The Court considered the appellant's challenge to the order passed by the Customs, Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata. The Tribunal had dismissed the appeal on the ground that the appellant had not complied with the amended provision of Section 35F applicable to Service tax matters. The Court noted that the issue of whether the amended provisions of Section 35F have retrospective operation had been settled in a previous decision.The Court analyzed the legal framework and precedents related to the interpretation of Section 35F. It highlighted that the provision has retrospective operation, as confirmed by a previous decision. The Court reasoned that the second proviso of Section 35F was inserted as a saving clause to ensure that the amended provision applies to cases where appeals were filed after a certain date. The Court emphasized that the right to file an appeal is conditional and subject to the requirements of Section 35F.Key evidence and findings included the appellant's non-compliance with the amended provision of Section 35F, leading to the dismissal of the appeal by the Tribunal. The Court considered the arguments put forth by the appellant regarding the applicability of the amended provisions and the retrospective operation of Section 35F.The Court concluded that the substantial questions of law raised by the appellant were answered against the appellant, and the appeal was dismissed based on the findings related to the application of Section 35F and the appellant's non-compliance with its provisions.The significant holdings of the judgment include:- Section 35F of the Act has retrospective operation and applies to all cases except those covered under the second proviso.- The second proviso acts as a saving clause, preserving the earlier provision of Section 35F for specific circumstances.- The Court affirmed the validity of the legislation by amendment with retrospective operation.- The Court upheld the circulars dated 16/9/2014 and 4/10/2014 in line with the judgment's findings.Overall, the Court's decision was based on the interpretation of Section 35F and its retrospective application, leading to the dismissal of the appellant's appeal due to non-compliance with the statutory requirements.