2025 (8) TMI 712 - HC - Central Excise

Appeal dismissed for non-compliance with Section 35F CEA is final; no restoration by CESTAT allowed

M/s Shree Marwal Sewashram Through Its Proprietor Sanjay Marwal Versus Central Board Of Indirect Tax And Others

M/s Shree Marwal Sewashram Through Its Proprietor Sanjay Marwal Versus Central Board Of Indirect Tax And Others - 2025:MPHC - IND:20574 1. ISSUES PRESENTED and CONSIDERED Whether the writ petition under Article 226 is maintainable against the order of dismissal of an application for restoration of an excise appeal by the CESTAT. Whether the Tribunal (CESTAT) has the power to waive or dispense with the mandatory pre-deposit under Section 35F of the Central Excise Act after the amendment by Finance Act 25 of 2014. Whether an appeal dismissed for non-compliance of pre-deposit can be restored by the CESTAT after a considerable lapse of time without any liberty granted by the High Court. Whether the petitioner is entitled to any relief or extension of time to deposit the pre-deposit amount for restoration of the appeal. Whether the High Court has jurisdiction to entertain a writ petition against the impugned order or the remedy lies exclusively under Section 35G of the Central Excise Act by way of appeal. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of Writ Petition under Article 226 against CESTAT's Order of Dismissal of Restoration Application Legal Framework and Precedents: The Central Excise Act, 1944, provides a statutory remedy of appeal before the High Court under Section 35G against orders of the CESTAT. The general principle is that writ jurisdiction under Article 226 is not to be invoked where an alternative statutory remedy exists. Court's Interpretation and Reasoning: The Court noted the submissions of the petitioner relying on judgments from other High Courts recognizing the maintainability of writ petitions in certain circumstances. However, the Court emphasized that the statutory scheme under the Central Excise Act envisages appeal under Section 35G as the appropriate remedy against CESTAT orders. Key Findings: The Court found that the impugned order dismissing the restoration application is an interlocutory order in the appeal proceedings and that the petitioner had statutory remedy by way of appeal. The writ petition was therefore not maintainable. Conclusion: The writ petition challenging the dismissal of the restoration application was not maintainable, as the petitioner had an alternative statutory remedy under Section 35G. Issue 2: Power of CESTAT to Waive or Dispense with Pre-Deposit under Section 35F after Finance Act 25 of 2014 Amendment Legal Framework: Section 35F of the Central Excise Act mandates pre-deposit of a specified percentage of the duty demanded before filing an appeal before the CESTAT. The Finance Act 25 of 2014 amended Section 35F to remove the Tribunal's discretion to waive or reduce the pre-deposit on grounds of undue hardship. Court's Interpretation and Reasoning: The Court held that post-amendment, the CESTAT is bound by the mandatory provisions and cannot entertain applications for waiver or reduction of pre-deposit on grounds of hardship. The Tribunal's dismissal of the appeal for non-deposit of pre-deposit was therefore in accordance with law. Application of Law to Facts: The petitioner failed to deposit the mandatory pre-deposit amount and sought waiver, which was rightly refused by the CESTAT. The Tribunal had no jurisdiction to entertain such waiver applications after the amendment. Conclusion: The Tribunal correctly dismissed the appeal for non-compliance with the mandatory pre-deposit requirement, and no waiver could be granted. Issue 3: Restoration of Appeal after Dismissal and Finality of Order Legal Framework: Once an appeal is dismissed for non-compliance of mandatory conditions and the order attains finality, the Tribunal becomes functus officio and cannot restore the appeal unless the order of dismissal is set aside by a higher forum. Court's Interpretation and Reasoning: The Court observed that the petitioner's appeal was dismissed in 2017, and multiple writ petitions and a review petition were dismissed without granting any liberty or direction to restore the appeal. The petitioner's belated application for restoration after seven years was rightly dismissed by the CESTAT as the order had attained finality. Treatment of Competing Arguments: The petitioner argued for restoration on the basis of partial deposit and proposed timeline for remaining deposit. The Court rejected this, emphasizing the absence of any statutory provision or judicial liberty permitting restoration after such delay without setting aside the dismissal order. Conclusion: The appeal could not be restored by the CESTAT after dismissal and finality of order, and the Tribunal's refusal to restore was valid. Issue 4: Entitlement to Extension of Time for Deposit of Pre-Deposit Amount Legal Framework: The mandatory pre-deposit under Section 35F must be complied with at the time of filing the appeal. No provision exists for extension of time or staggered payment after dismissal of appeal for non-deposit. Court's Interpretation and Reasoning: The petitioner's request for four months' time to deposit the balance amount after partial deposit was not supported by any legal provision. The Court held that such request could not be entertained after dismissal of appeal and finality of order. Conclusion: No extension of time or phased deposit of pre-deposit is permissible post-dismissal of appeal for non-compliance. Issue 5: Jurisdictional Scope and Appropriate Forum for Challenge Legal Framework: Section 35G of the Central Excise Act provides for second appeal before the High Court against orders of the CESTAT. The High Court's writ jurisdiction is generally excluded where statutory appeal exists. Court's Interpretation and Reasoning: The Court reiterated that the petitioner's remedy lay in filing an appeal under Section 35G against the dismissal order rather than filing writ petitions. The repeated filing of writ petitions was contrary to the statutory scheme. Conclusion: The High Court's writ jurisdiction cannot be invoked in place of the statutory appeal remedy under Section 35G.