TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 304
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....der was passed on 31 March 2015 by the Additional Commissioner, Central Excise, Customs and Service Tax, Allahabad, confirming the demand of service tax in the amount of Rs. 34.02 lacs. This was accompanied by a penalty under Sections 70, 76, 77 and 78 of the Finance Act, 1994. Section 35F of the Central Excise Act, 19441 has been made applicable by virtue of Section 83 of the Finance Act, 1994. Section 35F of the Act was amended by Finance (No. 2) Act, 2014 and reads as follows: "35F. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal. - The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal,-- (i) under sub-section (1) of section 35, unless the appellant has deposited seven and a half percent of the duty in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the Commissioner of Central Excise; (ii) against the decision or order referred to in clause (a) of sub-section (1) of section 35B, unless the appellant has deposited seven and a half percent of the duty, in....
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....xplanation.--For the purposes of this section "duty demanded" shall include,-- (i) amount determined under section 11D; (ii) amount of erroneous CENVAT credit taken; (iii) amount payable under rule 57CC of Central Excise Rules, 1944; (iv) amount payable under rule 6 of CENVAT Credit Rules, 2001 or CENVAT Credit Rules, 2002 or CENVAT Credit Rules, 2004; (v) interest payable under the provisions of this Act or the rules made thereunder." The petitioner has sought in these proceedings a writ restraining the respondents from enforcing the mandatory requirement of a pre-deposit of 7.5% of the duty demanded in pursuance of the order of adjudication dated 31 March 2015. The second relief is for a declaration that Section 35F of the Act, as amended with effect from 6 August 2000, so as to provide a mandatory pre-deposit of 7.5% for first appeals and 10% to second appeals of the total tax or penalty demanded, is ultravires or unconstitutional. We would deal with the challenge to constitutional validity in the first instance. As a first principle of law, a right of appeal is a statutory right and it is open to the legislature which confers a remedy of an appeal to condition the appeal....
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....templated which was held not to be violative of Article 14 of the Constitution. Subsequently, in Government of Andhra Pradesh vs. P. Laxmi Devi (2008) 4 SCC 720, the Supreme Court upheld the constitutional validity of Section 47-A of the Indian Stamp Act as applicable in the State of Andhra Pradesh. The proviso stipulated that no reference would be made by Registering Officer unless an amount equal to 50% of the deficit duty was deposited. Following the earlier decisions, this requirement was held to be constitutionally valid. Parliament while amending the provisions of Section 35F of the Act has required the payment of 7.5 percent of the duty in case the duty and penalty are in dispute or the penalty where such penalty is in dispute. In the case of an appeal to the Tribunal against an order passed by the Commissioner (Appeals), the requirement of deposit is 10% of the duty or as the case may be, the duty or penalty or of the penalty where the penalty is in dispute. The first proviso restricts the amount to be deposited to a maximum of Rs. 10 crores. Prior to the amendment, the Commissioner (Appeals) or the Appellate Tribunal were permitted to dispense with such deposit in a case....
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....ice Sudhi Ranjan Das speaking for the majority, after considering the law on the subject from the decision of the Privy Council in Colonial Sugar Refining Company Ltd. vs. Irving (1905) AC 369 upto Sawaldas Madhavdas vs. Arti Cotton Mills Ltd. AIR 1955 Bom. 332 deduced the following principles of law: "(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved, to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its ....
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....sly or impliedly with retrospective effect and (2) when the court to which appeal lay at the commencement of the suit stands abolished [see Garikapatti Veeraya v. N. Subbiah Choudhry (supra) and Colonial Sugar Refining Co. Ltd. v. Irving (supra)]. (emphasis supplied) In a later decision in Ramesh Singh and another vs. Cinta Devi and others AIR 1996 SC 1560, the Supreme Court observed as follows: "344. In all these decisions the view taken is that unless the New Act expressly or by necessary implication makes the provision applicable retrospectively, the right to appeal will crystalize in the appellant on the institution of the application in the Tribunal of first instance and that vested right of appeal would not be dislodged by the enactment of the new Act..." (emphasis supplied) The Supreme Court in Mohd. Saud and another vs. Dr. (Maj.) Shaikh Mahfooz and others (2010) 13 SCC 517 upheld the power of the legislature to curtail right of filing a letters patent appeal, in certain cases, by a subsequent enactment, by observing as under: "8. It has been held in a catena of decisions of this Court that an appeal is a creature of a statute and not an inherent right vide Garik....
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....f S. 97 (2) (a) does not permit such an interpretation. Under this clause, the amendment made in S. 2(2) of the principal Act does not affect any appeal against the determination of any question as is referred to in S. 47. The expression "shall not affect any appeal", in our opinion, does not take within its sweep even the cases where execution applications were pending before the executing Court..." (emphasis supplied) The aforesaid conclusion was reached on the basis of the enunciation of law laid down in the Constitution Bench judgment of the Supreme Court in Garikapatti Veeraya (supra) and in the English decision in Hough vs. Windus [(1884) 12 QBD 224, at page 237] by laying down as under: "17. Now the question for enquiry is whether there is anything in Act 104 of 1976 demonstrating that the right to file appeal which accrued on the date of filing of the execution application was taken away. True it is as said in Hough v. Windus (supra), the statutes should be interpreted if possible, so as to respect vested rights. It is also correct at the same time that the golden rule of construction is that, in the absence of anything in the enactment to show that law should have ....
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....ts or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is "deemed to be prospective only 'nova constitutio futuris formam imponere debet non praeteritis [2 c. Int. 392]". In the words of LORD BLANESBURG, "provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." "Every statute, it has been said", observed LOPES, L.J., "which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect". As a logical corollary of the general rule, that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, there is a subordinate rule to the effect that a statute or a section in it is not to be construed so as to have larger retrospective operation than its language renders necessary. In other....