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IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHOBA ANNAMMA EAPEN, J.
Babu Saidaly - Appellant
Versus
Union Of India - Respondent
WP(C) No.456 of 2017
Decided on : 09-01-2023
Central Excise Act, 1944 - Section 35F - Finance (No-2) Act, 2014 - Section 105 – Excise – Business - Petitioner was engaged in the manufacture and sale of excisable goods - Defects found in the books of accounts as well as suppression of manufactured quantity and value of excisable goods - Aggrieved by order, petitioner filed appeal before the Tribunal – Whether petition is maintainable – (Para 20)
Finding of the Court: Fact as to whether it will be beneficial to the assessee or not, does not merit any consideration as individual benefit is not to be appreciated at all - It is further held that endless litigations, arising out of waiver applications, have been brought to an end and looking to the very meagre percentage of the amount to be deposited, Section 35F of the Act, as amended, cannot be said to be violative of Article 14 of the Constitution of India much less of Article 19(1)(g) of the Constitution of India –
Result: Central Excise Act, 1944 - Section 35F - Finance (No-2) Act, 2014 - Section 105 – Excise – Business - Petitioner was engaged in the manufacture and sale of excisable goods - Defects found in the books of accounts as well as suppression of manufactured quantity and value of excisable goods - Aggrieved by order, petitioner filed appeal before the Tribunal – Whether petition is maintainable – (Para 20)
Finding of the Court: Fact as to whether it will be beneficial to the assessee or not, does not merit any consideration as individual benefit is not to be appreciated at all - It is further held that endless litigations, arising out of waiver applications, have been brought to an end and looking to the very meagre percentage of the amount to be deposited, Section 35F of the Act, as amended, cannot be said to be violative of Article 14 of the Constitution of India much less of Article 19(1)(g) of the Constitution of India –
Result: Petition dismissed
JUDGMENT :
The petitioner has approached this Court with the following prayers;
ii. to issue a Writ of certiorari or any other appropriate writ or order or direction to set aside Ext P8 circular issued by the 2nd respondent.
iii. to issue a Writ of certiorari or any other appropriate writ or order or direction to set aside Ext P6 order issued by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore
iv. to issue a Writ of certiorari or any other appropriate writ or order or direction to set aside Ext P3 order issued by the 3rd respondent, or alternately,
v. to issue a Writ of Mandamus or any other appropriate writ or order or direction to the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore to hear and dispose of Ext P4 appeal, on its merits, without insisting the pre-deposit as required under Section 35F of the Section 35F of the Central Excise Act, 1944 as amended as per Section 105 of the Finance (No-2) Act, 2014, in the peculiar facts and circumstances of the case.
vi. To direct the respondents to pay cost of this proceedings”
2. Brief facts of the case are as follows;
The petitioner is a firm, viz., M/s Ess Bee Plywood Industries, engaged in the manufacture of different types of plywood and selling the same in the open market. From the year 2008, the petitioner has been engaged in the manufacture and sale of excisable goods under the Central Excise Act, 1944 (for short, “the Act”). On 06.10.2012, the business premises of the petitioner were inspected by the Central Excise Officers and a search was conducted, consequent to which, Ext.P1 show cause notice dated 03.04.2013 for the years, 2009-10 to 2011-12, was issued alleging certain defects in the books of accounts as well as suppression of manufactured quantity and value of excisable goods. Subsequently, Ext.P2 second show cause notice dated 31.03.2014 for the year, 2013-14, was issued with a proposal for assessment of excise duty by the Additional Director. Thereafter, as per Ext.P3 common order dated 07.09.2015, Ext.P1 show cause notice dated 03.04.2013 was dropped and Ext.P2 Notice dated 31.03.2013 was finalized, upholding the estimated value and assessment of duty. Aggrieved by Ext.P3 order, the petitioner filed Ext.P4 appeal before the Customs, Excise & Service Tax Appellate Tribunal, Bangalore. Along with the appeal, Ext.P5 stay application was also filed. Thereafter, as per Ext.P6 order dated 05.10.2016, the Tribunal dismissed Ext.P4 appeal as well as Ext.P5 stay application on the ground that the appeal memorandum is not supported with payment of pre-deposit as mandated in Section 35F of the Act, as amended by the Finance (No.2) Act, 2014, with effect from 06.08.2014. Aggrieved by the said order, the petitioner has filed this writ petition.
3. I have heard the learned counsel for the petitioner and Sri.S.Manu, learned Standing Counsel for respondents.
4. The learned counsel for the petitioner submits that the Parliament enacted the Finance (No.2) Act, 2014, to give effect to the financial proposals of the Central Government for the financial year 2014-15 and the same was received the assent of the President on 06.08.2014. As per Section 105 of the Finance Act (No.2), 2014, Section 35F of the Act, was substituted with a new section, which mandates that unless the appellant deposits 7.5% or 10% of the duty or penalty in dispute, as the case may be, no appeal shall be entertained under Section 35 of the Act before the Commissioner (Appeals) or under Section 35B of the Act before the Appellate Tribunal. The learned counsel further submits that though Section 35F of the Act is substituted with a new section with effect from 06.08.2014, t
Point of law: Order of the Tribunal, dismissing the appeal for non compliance of the mandatory pre-deposit, has to be upheld and the writ petition is liable to be dismissed.
The court confirmed that the amendments to Section 35F of the Central Excise Act were constitutionally valid and required compliance for appeals.
The court upheld the mandatory pre-deposit requirement under Section 35F of the Central Excise Act, 1944, emphasizing that financial hardship does not justify waiver of this requirement.
The amended Section 35F of the Central Excise Act, 1944 does not permit waiving the pre-deposit requirement based on prior provisions.
Appellant entitled to interest on delayed refund as per Sections 11B and 11BB of the Central Excise Act, which specifically governs the timing and rate of interest applicable.
The court affirmed that a pre-deposit is mandatory for maintaining an appeal under Section 35F of the Central Excise Act, and jurisdictional challenges do not exempt compliance with statutory require....
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