Case Law Details
CA Bimal Jain
No Mandatory Pre-deposit for pursuing the Appellate remedy before the CESTAT as right of appeal for any case instituted prior to August 6, 2014 and such case is governed by the law prevailing at the date of institution of the suit or proceeding
Issue involved in this case was whether the Muthoot Finance Ltd. (the Petitioner) would have to deposit the amount of 7.5% of the tax confirmed, as a condition for pursuing the Appellate remedy before the Hon’ble Tribunal.
It was held by the Hon’ble High Court of Kerala that:
“the institution of a suit carries with it an implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit and, further, that the right of appeal that is vested is to be governed by the law prevailing at the date of institution of the suit or proceeding, and not by the law that prevails at the date of its decision or at the date of filing of the appeal……… ……..the petitioner, in whose case also the lis commenced in 2012, would not be required to deposit the amount of 7.5%, as required pursuant to the 2014 amendment, and in that respect, he would have an efficacious alternate remedy before the Tribunal where he can file an appeal, together with an application for waiver of pre-deposit and stay of recovery of the amounts confirmed against him. …………………. if the petitioner prefers a duly constituted appeal under the provisions of the Finance Act, 1994, as they stood prior to 6.08.2014, then the Appellate Tribunal shall number the Appeal, and consider the application filed by the petitioner for waiver of pre-deposit and stay of recovery of the amounts confirmed against him by …
order, on merits, and thereafter, proceed to hear the appeal itself in due course. The petitioner shall file the appeal, together with the application for waiver of pre-deposit and stay, before the Appellate Tribunal on or before 31.03.2015. I record …… that, till 31.03.2015, no steps for recovery of the amounts no steps for recovery of the amounts confirmed against the petitioner by Ext.P8 order will be either initiated or pursued by the respondents.
The writ petition is disposed as above”.
Our Comments:
The above judgment is providing relief for not making mandatory pre-deposit in terms of Section 35F of the Excise Act (Reproduced here in below) for any case instituted and lis commenced prior to August 6, 2014.The relevant extract of Section 35F of the Excise Act (with effect from August 6, 2014) is reproduced as under:
“35F. 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 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 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 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;
(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.”
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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