2010 (3) TMI 411 - HC - Central Excise

Deposit order under Section 35F appealable as an order made in appeal. Pursue statutory remedy.

The Court held that the deposit order under Section 35F of the Central Excise Act, 1944, is appealable under Section 35G as it is considered an order made ... Order directing deposit under Section 35F - order made in appeal - appeal under Section 35G - alternative statutory remedyOrder directing deposit under Section 35F - order made in appeal - Characterisation of an order requiring deposit under Section 35F as an order made in appeal - HELD THAT: - Section 35F commences with the words 'where in any appeal under this Chapter', and the deposit direction is issued in the context of appellate proceedings. There are no separate proceedings dealing with the deposit question; the requirement to deposit operates as part of the appellate process. Consequently, an order directing the appellant to deposit the duty under Section 35F is an order made in appeal and falls within the class of orders from which an appeal can be pursued under the appellate provisions. [Paras 4]An order directing deposit under Section 35F is an order made in appeal.Appeal under Section 35G - alternative statutory remedy - Maintainability of writ petition in presence of an alternative statutory remedy of appeal under Section 35G - HELD THAT: - Because the deposit order is an order made in appeal, it is amenable to challenge by appeal to the High Court under Section 35G (subject to the High Court being satisfied that a substantial question of law arises). In view of the availability of that statutory appellate remedy, entertaining a writ petition would short-circuit the statutory scheme. The Court therefore declines to exercise writ jurisdiction and dismisses the petition, while protecting the petitioner from dismissal of its appeal before the Appellate Tribunal for a limited period to enable resort to the statutory remedy. [Paras 5]Writ petition dismissed for want of maintainability in presence of appeal remedy under Section 35G; limited protection granted to preserve the petitioner's appeal.Final Conclusion: The Court held that an order directing deposit under Section 35F is an order made in appeal and is challengeable by appeal under Section 35G; accordingly, the writ petition was dismissed as an alternate statutory remedy was available, with a two week protection to prevent dismissal of the petitioner's appeal. Issues:Challenge to order passed by Appellate Tribunal under Section 35F of Central Excise Act, 1944 regarding deposit of duty amount. Preliminary objection raised on tenability of petition based on availability of appeal under Section 35G. Interpretation of Section 35F and Section 35G to determine if order for deposit is an appealable order.Analysis:The petitioner contested an order by the Appellate Tribunal under Section 35F of the Central Excise Act, 1944, mandating a deposit of half the duty amount, totaling Rs. 4 crores. The respondent raised a preliminary objection citing Section 35G, which allows appeals from orders passed by the Appellate Tribunal. Reference was made to a Madras High Court judgment emphasizing statutory remedies over writ petitions. The petitioner argued that the deposit order is not an order passed in appeal but a pre-condition for appeal filing, thus not falling under Section 35G. Sections 35F and 35G were examined to determine the appealability of the deposit directive.The Court deliberated on the language of Section 35F and Section 35G. Section 35F mandates deposit pending appeal, while Section 35G allows appeals from orders passed by the Appellate Tribunal. The Court concluded that the deposit order qualifies as an order made in appeal, as it is an essential step before appealing and no separate proceedings exist for deposit issues. Therefore, the deposit directive is deemed appealable under Section 35G of the Central Excise Act, 1944.In light of the above analysis, the Court found that the petitioner possesses an alternative remedy against the impugned order and declined to entertain the petition. Consequently, the writ petition was dismissed, with a directive to refrain from dismissing the petitioner's appeal before the CEGAT for two weeks from the judgment date.