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2026 Supreme(Online)(CESTAT) 2084
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Vasa Seshagiri Rao, Technical Member, Ajayan T.V., Judicial Member
Sameer-Center For Electromagnetics – Appellant
Versus
Commissioner Of GST And Central Excise – Respondent
Service Tax Appeal No. 41805 of 2016
For the Appellants/Petitioners: Mathanghi G.
For the Respondents: M. Selvakumar
An appellate authority cannot dismiss an appeal for non-compliance with pre-deposit requirements under S. 35F of the Central Excise Act when the appellant has demonstrably satisfied the statutory deposit threshold.
Headnote:The dispute arises under Section 35F of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, regarding the maintainability of an appeal dismissed for alleged non-compliance with mandatory pre-deposit requirements. The appellant challenged the rejection, contending that sufficient deposits had been made, including a payment made following an interim order. The appellate court examined the deposit records and the findings of the commissioner and determined that the mandatory pre-deposit requirements were satisfied, rendering the dismissal on procedural grounds unsustainable. The central issue was whether the appeal was rightly rejected for failure to comply with pre-deposit conditions. The Tribunal reasoned that since the appellant had made payments exceeding the statutory 7.5% requirement and the interim order had already acknowledged prima facie merits in favor of the appellant, the rejection of the appeal for lack of pre-deposit was unjustified and violated the principles of natural justice. The appeal is allowed by way of remand with directions to the lower authority to decide the matter on its merits.
| Table of Content |
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| 1. overview of pre-deposit compliance and appellate dismissal. (Para 1 , 2 , 3 , 4 , 5) |
| 2. unjustified rejection of appeal despite compliance with statutory pre-deposit. (Para 6 , 7 , 8) |
Per Mr. VASA SESHAGIRI RAO
The present appeal is directed against Order-in Appeal No. 414/2016(STA-I) dated 25.07.2016 passed by the Commissioner of Service Tax (Appeals-III), Chennai, whereby the Ld. Commissioner (Appeals) rejected the appeal as not maintainable on the ground that the appellant had not made the mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994.
2. Heard both sides and perused the material available on record.
3. The Ld. Advocate Ms. G. Mathanghi for the appellant submitted that the Commissioner (Appeals) dismissed the appeal solely on the ground of alleged non-compliance with the pre-deposit requirement under Section 35F of the Central Excise Act, 1944 without deciding the matter on merits. It was submitted that pursuant to Interim Order No. 162/2013 dated 07.02.2013, the appellant had deposited ₹3,00,000/- on 22.02.2013 and proof of such payment has now been placed before this Tribunal. She therefore prayed that the matter may be remanded to the Commissioner (Appeals) for decision on merits.
4. On the other hand, the Ld. Authorized Representative Shri M. Selvakumar for the Department, reiterated the findings contained in the impugned order.
5. We find from the records that as against the confirmed demand of ₹40,14,367/-, the statutory pre-deposit at 7.5% worked out to approximately ₹3,01,078/-. We further find that the appellant had already deposited ₹6,78,101/- on 01.06.2012, after the passing of Order-in-Original No. 19/2012 dated 29.02.2012, which itself was substantially in excess of the mandatory requirement under Section 35F . Even thereafter, pursuant to Interim Order No. 162/2013 dated 07.02.2013, the appellant further deposited ₹3,00,000/- on 22.02.2013.
6. We further find that while passing the Interim Order dated 07.02.2013, the learned Commissioner (Appeals) had recorded that “the issue seems, prima facie, to be in favour of the appellant” and had also taken note of the fact that the appellant had already paid ₹6.78 lakhs. Despite such findings and despite compliance with the direction regarding pre-deposit, the appeal ultimately came to be rejected on the ground of alleged non-compliance. Such rejection, ignoring the deposits already made and the prima facie findings recorded in the Interim Order itself, is wholly unjustified and unfair to the appellant and therefore cannot be sustained in law.
7. In view of the fact that the appellant has complied with the requirement of mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, we set aside the impugned order and remand the matter back to the learned Commissioner (Appeals) with a direction to decide the same on merits, after following the principles of natural justice, and thereafter pass a reasoned order in accordance with law within a period of three months from the date of receipt of this order.
8. In the result, the appeal is allowed by way of remand.
