Custom, Excise & Service Tax Tribunal
Kisan Sahkari Chini Mills Ltd vs Meerut-I on 28 March, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.II
Excise Appeal No.70379 of 2023
(Arising out of Order-in-Appeal No.MRT-EXCUS-000-APPL-MRT-48-2023-24,
dated-30/05/2023 passed by Commissioner (Appeals) CGST, Meerut)
M/s Kisan Sahkari Chinni Mills Ltd. .....Appellant
(Sneh Road, Najibabad Kotdwar Road,
Bijnor, Uttar Pradesh 246701)
VERSUS
Commissioner, Central Excise & CGST, Meerut-I
....Respondent
(Mangal Pandey Nagar, Opposite C.C.S. University, Meerut, Uttar Pradesh, 250005) APPEARANCE:
Absent for the Appellant Shri Santosh Kumar, Authorized Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.-70172/2025 DATE OF HEARING : 28.03.2025 DATE OF DECISION : 28.03.2025 SANJIV SRIVASTAVA:
When the matter was called none appeared on behalf of the Appellant nor is there any adjournment request. Since, the issue is in a very narrow compass, the appeal is taken up for hearing and disposal after hearing the learned Authorized Representative.
2.1 This appeal is directed against Order-in-Appeal No.MRT- EXCUS-000-APPL-MRT-48-2023-24, dated-30/05/2023 passed by Commissioner (Appeals) CGST, Meerut. By the impugned order Commissioner (Appeals) has dismissed the appeal of the Appellant by observing as follows:-
2 Excise Appeal No.70379 of 2023"DISCUSSION & FINDINGS 4.1 I have carefully examined the material facts available on record viz. the grounds of appeal put forth the appellant and the findings of the adjudicating authority in the subject Order-in-Original No. 02/CE/AC/Bijnor/2021-22 dated 30.03.2022. As regarding personal hearing. I find that four opportunities of personal hearing [viz. on 17.11.2023, 16.02.2023, 02.03.2023 and 12.04.2023] have been accorded to the appellant however the same have not been availed by them in as much as no one appeared for and on their behalf to attend the same. In this regard, I find that in terms of Section 85 of the Finance Act, 1994, appropriately read with the provisions of Section 35 of the Central Excise Act, 1994, the appellant was eligible to seek three adjournments from the appellate authority and thus, grant of four opportunities of personal hearing to the appeliant amply fulfills the mandated provisions of grant of personal hearing and consequently I find that the principles of natural justice have appropriately been adhered to in the subject case. Accordingly, I proceed to adjudge the subject appeal as under.
4.2 I find that the subject Order-in-Original No. 02/CE/AC/Bijnor/2021-22 dated 30.03.2022 has been stated to have been received by the appellant on 07.04.2022 and the subject appeal has been filed on 12.05.2022. Thus, I find that the subject appeal has been filed within the specified period of two months as per the provisions of Section 85 of the Finance Act, 1994.
4.3 I further find that as per the provisions of Section 35F of the Central Excise Act, 1944 proof of mandatory pre-deposit of seven and a half per cent. of the duty, in case where duty or duty and penalty are in dispute, has to be submitted while fifing the appeal under the provisions of Section 35 of the Central Excise Act, 1944. In this regard I find that together with the subject appeal the appellant has submitted copy of DRC-03 bearing ARN AD090522006652B dated 07.05.2022 for Rs.3,11,770/-. In the matter, I further find that the Board has vide its Instruction bearing No. CBIC- 240137/14/2022-SERVICE TAX SECTION-CBEC dated 28.10.2022 has inter alia clarified as under:
Attention is invited to Miscellaneous transitional provisions sub-section (6)(b), sub-section (7)(a) and sub-section (8)(a) of Section 142 of the CGST Act, 2017, which, inter alia, provides that any credit, tax, interest, fine or penalty recoverable from the person before, on or after 1st July, 2017 under the existing law (Central Excise Act and Chapter-V of Finance Act, 1994) shall he recovered as an 3 Excise Appeal No.70379 of 2023 arrear of tax under CGST Act. It is, however, settled that pre-deposit as a requirement for exercising the right to appeal neither is in the nature of duty nor can be treated as arrears under the existing law and hence cannot be said to be covered under transitional provisions of CGST Act.
In view of above, it is clarified that payments through DRC-
03 under CGST regime is not a valid mode of payment for making pre-deposits under section 35F of the Central Excise Act, 1944 and Section 83 of Finance Act, 1994 read with section 35F of the CEA. There exists a dedicated CBIC-GST Integrated portal, https://cbic-gst.gov.in Board's Circular No. 1070/3/2019-CX dated 24th June, 2019 refers in this regard), which should only be utilized for making deposits under the Central Act, 1944 and the Finance Act, 1994.
4.3.1 From the cited text of the said Instruction dated 28.10.2022 it is explicitly and unambiguously clear that the same is essentially clarificatory in nature and, as is legally established, the same is retrospective in nature as it only clarifies the existing provisions of the statute. I find that the retrospective nature of clarificatory provisions has been established vide plethora of judgments of courts and tribunals, and herein for referential ease following judgments of the Hon'ble Supreme Court are being cited:
(i) Union of India Vs. V.V.F. Ltd. [2020 (372) E.L.T. 495 (S.C.)]: Held:
Modification/variation when clarificatory and retrospective in operation Doctrine of promissory estoppel Clarificatory in nature issued in larger public interest and in Revenue's interest - Can be made applicable retrospectively to prevent frustration of object and purpose and intention of Government;
(ii) Surinder Singh Vs Union of India [2016 (340) E.L.T. 97 (S.C.)]: Held:
Drawback - Exports proceeds not realized Recovery of Drawback - Customs portion - Retrospective effect of Rule 16A of Customs, Central Excise Duties and Service Tax Drawback Rules, 1995-Impugned Rule only clarificatory in nature and hence applicable retrospectively,
(iii) W.P.I.L. Ltd. CCE, Meerut [2005 (181) E.L.T. 359 (S.C.)]: Held: Interpretation of statutes - Clarificatory notification - Merely clarifies position and makes explicit what was implicit - It takes effect retrospectively; and
(iv) CCE, Shillong Vs. Wood Craft Products Ltd. (1995 (77) E.LT. 23 (S.C.)): Held: Central Excise Tariff-Amendment 4 Excise Appeal No.70379 of 2023 thereto whereas of clarificatory in nature to be effective right from the beginning.
4.3.2 In this regard, I further find that vide this office's letter bearing even C. No. 66 dated 30.10.2023 the appellant was requested that as regarding the requisite mandatory pre- deposit, the proper Challan under the provisions of Central Excise Act, so bearing CIN and date, may be submitted. In this regard, telephonic reminders were also issued to the appellant. But the appellant has not submitted the requisite evidentiary Challan/details regarding deposition of mandatory pre-deposit till date.
4.3.3 In the matter I further find that the issue of deposition of mandatory pre-deposit in respect of filing appeal has been the subject matter of judicial proceedings. In this regard, I further find that the Hon'ble Courts and Tribunals have made the following pronouncements, the ratio of which is also squarely applicable in the subject case i.e. in the case of first appeal filed before the appellate authority:
① Kantilal Bhaguji Mohite Vs. CCE&ST, Pune-III [2020 (371) E.L.T. 829 (Bom.)]: Held: Appeal to Appellate Tribunal not to be entertained when mandatory pre-deposit condition not complied with - Contention that Tribunal not empowered to dismiss appeal simply because of assessee 's failure to make mandatory pre-deposit and has to dispose it of on merits, not acceptable - Pre-deposit condition which is mandatory in nature cannot be waived, relaxed or diluted in writ jurisdiction - Article 226 of Constitution of India and Section 35F of Central Excise Act, 1944.
(ii) Diamond Entertainment Techno. P. Ltd. Vs. Commissioner of CGST, Dehradun (2019 (368) E.L.T. 579 (Del.)]: Held: Appeal before CESTAT -Maintainability of Appeal filed after 6-8-2014 without compliance with mandatory requirement of pre-deposit of 7.5% under amended provisions of Section 35F of Central Excise Act, 1944 Issue no longer res integra, as conclusively decided in Anjani Technoplast Ltd. [2015 (326) E.L.T. 472 (Del)) and judgment in Anjani Technoplast (supra) stood merged with dismissal of Civil Appeal by Supreme Court [2017 (348) E.L.T. A132 (S.C.)] -Reading of said Section 35F ibid, reveals, by usage of peremptory words "shall not" therein, that there is absolute bar on CESTAT for entertaining any appeal, unless assessee deposits 7.5% of duty confirmed against it by authority below-Allowing CESTAT to entertain appeal, preferred by assessee after said date, therefore, to amount to allowing CESTAT to act in violation, not only of main body of Section 35F ibid but also of second proviso thereto, and would reduce command of legislature to dead 5 Excise Appeal No.70379 of 2023 letter - Prayer of petitioner for being permitted to prosecute appeal before CESTAT without complying with condition of mandatory pre-deposit, cannot be granted - No substance in writ petition-Article 226 of Constitution of India.
(iii) Ankit Mehta Vs. Commissioner of CGST, Indore [2019 (368) E.L.T. 57 (M.P.)]: Held: Stay/Dispensation of pre-
deposit - Mandatory pre-deposit-Waiver of Assessee failed to deposit mandatory pre-deposit citing financial hardships - No provision under Customs Act, 1962 empowering Tribunal or Commissioner (Appeals) to waive or reduce pre-deposit - Assessee liable to deposit mandatory amount of 7.5% of demand - Section 129E of Customs Act. 1962.
(iv) Nimbus Communications Limited Vs. Commissioner of S.T., Mumbai-IV [2016 (44) S.T.R. 578 (Bom.)]: Held:
Stay/Dispensation of pre-deposit Mandatory pre-deposit under amended Section 35F of Central Excise Act, 1944 w.e.f. 6-8-2014-Second proviso to Section 35F ibid clearly indicates that the requirement of mandatory pre-deposit shall not apply to stay applications and appeals which were pending prior to 6-8-2014 Amended Section 35F ibid required to be complied with when appeal filed after 6-8- 2014 even if show cause notice issued prior to such amendment Appeal not maintainable for failure to deposit mandatory amount. [2015 (39) S.T.R. 177 (All.), 2016 (43) ST.R. 25 (Mad.) relied on] - Pre-deposit - Section 35F of Central Excise Act, 1944 as amended on 6-8-2014- Constitutionality of - Mandatory requirement of pre-deposit of 7.5% is a reasonable condition and in no way affects vested right of appeal - Amended Section 35F ibid merely ensures that interests of Revenue are secured and so not unconstitutional.
(v) Sree Annapoorna Hospitality Services P. Ltd. Vs. C.C., C.E. & S.T., Coimbatore [2015 (39) S.T.R. 804 (Mad.)]:
Held: Stay/Dispensation of pre-deposit - Mandatory pre- deposit of 7.5% or 10% not reducible by High Court -Grant of 7.5% of demand - In absence of violation of principles of natural justice and procedures, assessee is bound to make this deposit for appeal - It is a mandatory deposit which cannot be reduced by High Court - Section 35F of Central Excise Act, 1944 as applicable to Service Tax vide Section 83 of Finance Act, 1994. [para 5]
(vi) Chandra Sekhar Jha Vs. Union of India [2022 (380) E.L.T. 130 (S.C.)]: Held: Customs: In substituted provision w.e.f. 6-8-2014, while quantum of mandatory pre-deposit to be paid for filing appeal was scaled down from 100% to much lower percentage (7.5% or 10% as case may be with a maximum of 10 Crore) of disputed amount but discretion 6 Excise Appeal No.70379 of 2023 earlier available with appellate authority to dispense with such pre-deposit, was withdrawn - Any appeal or stay application filed after 6-8-2014 governed by substituted provisions of Section 129E of Customs Act, 1962, earlier provision would be applicable only to appeals/stay applications pending with appellare authority on aforesaid date -Interpretation of Law - Substitution of a statutory provision results in repeal of earlier provision and its replacement by new provision.
In terms of the unambiguously explicit provisions of Section 35F of the Central Excise Act, 1944 and the related findings in this regard, as above, I find the subject appeal cannot be entertained as the appellant has failed to make the requisite statutorily mandatory pre-deposit.
4.5 Accordingly, without going into the merits of the case, I hereby reject the subject appeal [Appeal No. 19-CE/APPL- MRT/MRT/2022-23 dated 12.05.2022] filed by M/s Kisan Sahkari Chini Mills Ltd., Sneh Road, Najibabad Kotdwar Road, Najibad Distt. Bijnor (U.P.) due to the failure of the appellant to make the mandatory pre-deposit in terms of the provisions of Section 35F of the Central Excise Act, 1944."
2.2 From the above impugned order it is evident that Commissioner (Appeals) has dismissed the appeal of the Appellant only for want of mandatory pre-deposit.
3.1 None for the Appellant. Heard Shri Santosh Kumar, Authorized Representative appearing for the Revenue and perused the appeal records.
3.2 On perusal of the Appeal records I find that Appellant have complied with the conditions of the mandatory pre-deposit i.e. 10% of the disputed amount, as required in terms of Section 35F of the Central Excise Act,1944 for consideration of appeal by the Tribunal has been deposited at the time of filing of the appeal.
3.3 Arguing for the Revenue learned Authorized Representative fairly agrees that the Appellant have made the mandatory pre-deposit.
4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument.
7 Excise Appeal No.70379 of 20234.2 Taking the note of the above fact that the impugned order has not been passed on merits of the case, the matter needs to be remanded for reconsideration by Commissioner (Appeals) as the Appellant has deposited the entire amount required to be deposited as mandatory pre-deposit for consideration of the appeal by this Tribunal i.e. 10% of the disputed amount as prescribed by Section 35F of the Central Excise Act, 1944.
4.3 By making deposit of 10% of the disputed amount appellant has deposited more than the amount that was required to be pre-deposited in terms of Section 35F for consideration of appeal by the First Appellate Authority - Commissioner (Appeal).
4.4 I want to make it clear that Appellant shall not withdraw any part of the pre-deposited amount or make a claim for any refund of this amount till the disposal of the appeal by the Commissioner (Appeal) in remand proceedings.
5.1 Appeal is allowed and matter is remanded back to Commissioner (Appeal) for denovo consideration.
5.2 Since the appeal has been quite old, Commissioner (Appeal) is directed to decide the appeal on merits of the case by following the principles of natural justice within three months from the date of receipt of this order.
(Operative part of the order is pronounced in open court) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Nihal