TaxTMI 
TaxTMI 
2018 (6) TMI 249
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....% as mandated for filing of second appeal before the Tribunal and 7.5% as mandated for filing of first appeal before the Commissioner (Appeals). 3. The petitioner has challenged validity of circular dated 27th April, 2017 issued by the Tribunal, based on the larger Bench decision of the Tribunal in In Re: Quantum of Mandatory Deposit, reported as 2017 (349) ELT 477 (Tri.-LB), stipulating that while preferring an appeal against an order of Commissioner (Appeals), the appellants are required to deposit 10% of the amount of duty and penalty imposed and confirmed separately and over and above pre-deposit of 7.5% for filing first appeal before Commissioner (Appeals). 4. Second contention of the petitioner is that requirement of pre-deposit mandated vide Section 35F of the C.E. Act, does not apply to service tax appeals preferred under Sections 85 and 86 of the Finance Act, 1994. 5. In view of the limited controversy and question for consideration, we need not refer to the factual matrix in detail, except notice that the writ petitioner - M/s Santani Sales Organisation has preferred second appeals bearing Nos. ST 52898/2016 and ST 50372/2017 before the Tribunal against the order....
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.... penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of sub-section (1) of section 35B, unless the appellant has deposited ten per cent. 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 the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed rupees ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation.- 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 6 of the Cenvat Credit Rules, 2001 or the Cenvat Credit Rules, 2002 or the Cenvat Credit Rules, 2004." Section 35F requires mandatory deposit of specified percentage of duty demanded or penalty imposed before filing an appeal and....
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....nal products under the provisions of this Act or the rules made thereunder and such order is passed by the Commissioner (Appeals) on or after the date appointed under Section 109 of the Finance (No. 2) Act, 1998: Provided further that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (d) where - (i) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; (ii) the amount of fine or penalty determined by such order, does not exceed Two lakh rupees;" 9. As per clause (a) to Section 35B (1), any person aggrieved by an order or decision of the Principal Commissioner of Central Excise or Commissioner of Central Excise as the adjudicating authority, can file an appeal before the Tribunal. In terms of clause (ii) of Section 35F, the appellant, while filing an appeal against order referred to in clause (a) of sub-section (1) of Section 35B, is req....
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....ispute pursuant to the order passed by an officer below the rank of Principal Commissioner or Commissioner of Central Excise. 12. It is clear from the aforesaid provisions that a graded scale of pre-deposit has been provided. In case of first appeal, whether before the Tribunal or before the Commissioner (Appeals), 7.5% of the duty and penalty in dispute must be deposited. In case of second appeal before the Tribunal, the amount gets enhanced from 7.5% to 10%. 13. An appeal, whether first or second, is continuation of original proceedings. Further, appeal being a substantive right created by the statute can be circumscribed by the conditions imposed by the Legislature, including condition of pre-deposit. However, there are rulings that condition of pre-deposit should not be so onerous and harsh so as to amount to an unreasonable restriction, thereby rendering and making the right of appeal illusory and delusive [See Seth Nand Lal And Another Vs. State of Haryana And Others AIR 1980 SC 2097 and Mardia Chemicals Ltd. And Others Vs. Union of India And Others (2004) 4 SC 311]. In Law and practice appeals are remedial right of critical importance because it empowers the superior f....
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....ion will be more difficult to sustain. While we do not pronounce, we indicate the implication of the High Court's untenable view. XXXX 15. When dealing with a question of court fee, the perspective should be informed by the spirit of the magna carta and of equal access to justice which suggests that a heavy price tag on relief in Court should be regarded as unpalatable." (emphasis supplied) These decisions relate to interpretation of Statutes imposing court fees and taxing enactments on charging provisions in general. Charging provision of the taxing law must be strictly construed. In taxing enactment one should normally look at what is said in the provision, without reading anything into it impliedly or on the basis of presumption, for there is no room for any intendment [Federation of A.P. Chambers of Commerce of Industry Vs. State of A.P, (2001) 247 ITR 36 (SC)]. We would keep the said principles in mind while interpreting the provisions of law relating to pre-deposit which curtails the right to appeal. 15. Language of Section 35F of the C.E. Act is unchallenging and meaning of words and conditions placed is plain and lucid. Requirement is to pre-depo....
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....ragraph No. 2, more specifically 2.1, the Circular only states that in the event of appeal of appellant against order of Commissioner (Appeals) before the Tribunal, 10% is to be paid on the amount of duty demanded or penalty imposed by the Commissioner (Appeals). In fact, the clarification given by the Board does not indicate what is in the mind of the law makers enacting while the provisions of Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962. Be that as it may, we find that the said provisions of pre-depositing an amount for preferring 1st appeal against the adjudication order needs to be done so, at the rate of 7.5% of the duty confirmed or the penalty imposed as the case may be. This would mean that the first appeal can be entertained only deposit of such an amount and on conclusion of the proceedings, he has option to go further in appeal before first appellate authority or if the appeal is disposed of, amount pre-deposited by him which is equivalent to 7.5% of the duty confirmed or penalty imposed as the case may be, needs to be refunded in accordance with law. 6.2 As regards the second appeal preferred against the first appellate....
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....gal position that the right to second appeal is a statutory right, but then states that second appeal is independent of the right of first appeal. Appeals whether first or second are continuation of the original proceedings. 17. In the counter affidavit filed on behalf of the first respondent, reference is made to a decision of the Principal Bench of the Tribunal dated 27th March, 2015 in the case of M/s Balajee Structural (India) Private Limited versus CCE, Raipur, Interim Order No. IO/14/2015-[CR], holding that if the appellant had deposited 10% of the duty confirmed before preferring the appeal before the Tribunal, there would be sufficient compliance of the provision for mandatory deposit. The decision does not support the stand and stance of the Revenue. 18. However, similar view in favour of the Revenue was expressed by the Tribunal, Eastern Zonal Bench, Kolkata in Hindalco Industries Limited and Others versus Commissioner of Central Excise, Kolkata-II, 2016-TIOL-3050-CESTAT-KOL. The reasoning given by the Tribunal in this case, which is in paragraph 4.2, is rather interesting and reads as under:- "4.2 It is observed from the case records that neither Section 3....
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....rded would not matter and help us in interpreting Section 35F of the C.E. Act. 20. Our opinion and ratio that difference between 7.5% and 10% is required as a pre-deposit, gets affirmation in view of Circular No.984/08/2014-CX dated 16th September, 2014, which has been referred to by the Tribunal in In Re: Quantum of Mandatory Deposit (supra). Paragraphs 2 and 3 of the said Circular read as under:- "2. Quantum of pre-deposit in terms of Section 35F of Central Excise Act, 1944 and Section 129E of the Customs Act, 1962: 2.1 Doubts have been expressed with regard to the amount to be deposited in terms of the amended provisions while filing appeal against the order of Commissioner (Appeals) before the CESTAT. Sub-section (iii) of Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962 stipulate payment of 10% of the duty or penalty payable in pursuance of the decision or order being appealed against i.e. the order of Commissioner (Appeal). It is, therefore, clarified that in the event of appeal against the order of Commissioner (Appeal) before the Tribunal, 10% is to be paid on the amount of duty demanded or penalty imposed by the Comm....
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....unt of duty or penalty is partly reduced, computation of 10% pre-deposit for filing a second appeal would be done from the reduced amount, and not on the basis of duty and penalty imposed in the order-in-original. Paragraph 3 stipulates that the pre-deposit would include deposits or payments made prior to the passing of the order-in-original. This is relevant. Deposits made during the pendency of the proceedings, or even after the order-in-original is passed, have to be taken into consideration for determining and deciding whether condition of pre-deposit of 7.5% or 10% has been satisfied. Earlier deposits do not get obliterated and are not to be treated as inconsequential. Equally pertinent is the second sentence in paragraph 3.1, which states that any shortfall from the amount stipulated in the Section shall have to be paid before filing of an appeal before the appellate authority. 21. Second contention of the petitioner relating to inapplicability of section 35F of the C.E. Act, i.e. Central Excise Act, to appeals preferred before the Tribunal under Section 86 of the Finance Act, is however, without merit and has to be rejected. Sections 83, 85 and 86 of the Finance Act, as t....
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....nterest or penalty: Provided that an order enhancing the service tax, interest or penalty shall not be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement. (5) Subject to the provisions of this Chapter, in hearing the appeals and making order under this section, the Commissioner of Central Excise (Appeals) shall exercise the same powers and follow the same procedure as he exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944. 86. Appeals to Appellate Tribunal.-(1) Save as otherwise provided herein, an assessee aggrieved by an order passed by a Commissioner of Central Excise under Section 73 or Section 83-A xxx, or an order passed by a Commissioner of Central Excise (Appeals) under Section 85, may appeal to the Appellate Tribunal against such order within three months of the date of receipt of the order: Provided that where an order, relating to a service which is exported, has been passed under Section 85 and the matter relates to grant of rebate of service tax on input services, or rebate of duty paid on inputs, used in providing suc....
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.... the order. Explanation.-For the purposes of this sub-section, "jurisdictional Chief Commissioner" means the Chief Commissioner having jurisdiction over the concerned adjudicating authority in the matter. (3) Every appeal under sub-section (2) or sub-section (2-A) shall be filed within four months from the date on which the order sought to be appealed against is received by the Committee of Chief Commissioners or, as the case may be, the Committee of Commissioners. (4) The Commissioner of Central Excise or [any Central Excise Officer subordinate to him or the assessee, as the case may be, on receipt of a notice that an appeal against the order of the Commissioner of Central Excise or the Commissioner of Central Excise (Appeals) has been preferred under sub-section (1) or sub-section (2) or sub-section (2-A) by the other party may, notwithstanding that he may not have appealed against such order or any part thereof, within forty-five days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Commissioner of Central Excise or the Commissioner of Central Excise (Appeals), ....
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....king orders under the Central Excise Act, 1944." Section 83 of the Finance Act states that stipulated provisions of the C.E. Act, as in force from time to time and as they apply in relation to a duty of excise, shall apply in relation to service tax. Section 35F of the C.E. Act by virtue of Section 83 of the Finance Act equally applies to service tax appeals. The words or expression "as in force from time to time" and "as they apply to in relation to duty of excise" in Section 83 of the Finance Act with reference to the stated provisions of the C.E. Act, clearly reflects and clinches the issue that the legislature wanted subsequent amendments in the enumerated sections of the C.E. Act, would equally apply to service tax. This is the case of reference or citation of one or more sections into other statute and not reference by incorporation. Sometimes distinction between incorporation by reference and adoption of provisions by mere reference or citation is difficult to draw, but in the present case in view of the clear legislative mandate and the language used in Section 83 of the Finance Act, this difficulty does not arise. We, therefore, need not expound and refer to the said di....
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....ettled that the appellate jurisdiction of a superior court is not taken as excluded simply because subordinate court exercises its special jurisdiction. In G.P. Singh's „Principles of Statutory Interpretation‟. It is stated: "The appellate and revisional jurisdiction of superior courts is not taken as excluded simply because the subordinate court exercises a special jurisdiction. The reason is that when a special Act on matters governed by that Act confers a jurisdiction to an established court, as distinguished from a persona designata, without any words of limitation then, the ordinary incident of procedure of that court including any general right of appeal or revision against its decision is attracted." 22. But an exception to the aforementioned rule is on matters where the special Act sets of it a self-contained Code the applicability of the general law procedure would be impliedly excluded. (See Upadhyaya Hargovind Devshanker v. Dhirendrasinh Virbhadrasinnhji Solanki). (emphasis supplied)" 23. Section 86 of the Finance Act provides for an appeal before the Tribunal and Section 83 of the Finance Act makes Section 35F of the C.E. Ac....