Custom, Excise & Service Tax Tribunal
2) M/S.Hindalco Industries Ltd vs 2,3,4) Commissioner Of Central Excise, ... on 29 August, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
1-16) Appeal Nos. E/75696, 75698, 75743, 75744, 75763, 75764, 75773/16, ST/75482/16, C/75880-75887/16
(Arising out of
Sl.No.1,2,3,4,5,6,7,8) Order-in-Appeal Nos.11/KOL-II/2016, 13/KOL-II/2016, 08/KOL-II/2016, 04/KOL-II/2016, 02/HAL/2016, 03/HAL/2016, 07/KOL-V/2016, 05/SLG-ST/2016 respectively all dated 15.02.2016 & all passed by the Commissioner(Appeal-I) of Central Excise, Kolkata.
Sl.No.9-16) Order-in-Appeal Nos.1025-32/Pat/Cus/Appeal/2016 dated 22.02.2016 passed by Commissioner (Appeals) of Customs, Central Excise & Service Tax, Patna.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, MEMBER(TECHNICAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
1,2) M/s.Hindalco Industries Ltd.
3,4) M/s.Encon Enterprises Pvt.Ltd.
5,6) M/s.Siemens Ltd.
7) M/s.Tarasafe International Pvt.Ltd.
8) Shri Sanjay Agarwal
9) Shri Dhanush Shah
10) Shri Guddu Rai
11) Shri Ramchandra Kandoi
12) Shri Dinesh Kumar, Prop. of Dinesh Vastralaya
13) Shri Ramshankar Prasad, Prop. of Sri Shyam Trading
14) Shri Sanoj Kumar, Prop. of M.K.Vastralaya
15) Shri Paras Nath Prasad, Prop. of Vastra Sansar
16) Shri Chandrasekhar Prasad, Prop. of R.S. Synthetics
Applicant (s)/Appellant (s)
Vs.
1,2,3,4) Commissioner of Central Excise, Kolkata-II
5,6) Commissioner of Central Excise, Haldia
7) Commissioner of Central Excise, Kolkata-V
8) Commissioner of Central Excise & Service Tax, Siliguri
9-16) Commissioner of Customs(P), Patna
Respondent (s)
Appearance:
S/Shri Ravi Raghavan, Advocate, Miss Satabdi Chatterjee, Advocate, Sanjay Bhowmik, Advocate, Vikram Khaitan, C.A., Navin More, C.A. for the Appellant (s) S/Shri Rajeev Gupta, Commr.(AR), K.Chaudhary, Supdt.(AR), A.Roy, Supdt.(AR), S.S.Chattopadhyay, Supdt.(AR) & S.Mukherjee, Supdt.(AR) for the Revenue CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing :- 29.08.2016 Date of Decision :- 31.08.2016 ORDER NO.FO/A/75948-75963/2016 Per Shri H.K.Thakur.
Defect Memos were issued to the Appellants by CESTAT, Registry, Kolkata to deposit remaining 7.5% of the duty as required under Section 35F(iii) of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962, in addition to 2.5% deposited by the Appellants.
2. S/Shri Ravi Raghavan, (Advocate), Miss Satabdi Chatterjee, (Advocate), Sanjay Bhowmik, (Advocate), Vikram Khaitan, (C.A.) and Navin More, (C.A.) appeared on behalf of the respective Appellants. Learned Advocate Shri Ravi Raghavan leading the arguments for the Appellants submitted that as per the language of Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962, read with CBEC Circular No.984/8/2014-CX dated 16.09.2014, only differential 2.5% of deposit is required to be paid as the remaining 7.5% of the deposit was already made before the first appellate authority at the time of admitting of Appeals before Commissioner(Appeals). Learned Advocate made the Bench go through para 2.1 of the CBEC Circular dated 16.09.2014 to argue that only 10% of the duty demanded by the first appellate authority is required to be paid out of which 7.5% already stands paid. It was his case that an appellant who did not pay 7.5% deposit before first appellate authority, then such an appellant is required to deposit only 10% of duty confirmed for entertaining appeal, even if his appeal might have been dismissed by first appellate authority for non-compliance of 7.5% mandatory deposit. That on principles of equity in the case of other Appellants, who deposited 7.5% before the first appellate authority, should be required to pay only additional 2.5% of duty confirmed as deposit.
3. S/Shri Rajeev Gupta, Commr.(AR), K.Chaudhary, Supdt.(AR), A.Roy, Supdt.(AR), S.S.Chattopadhyay, Supdt.(AR) & S.Mukherjee, Supdt.(AR) appeared on behalf of the Revenue. Shri Rajeev Gupta, Commr.(AR) argued that in all other Benches of CESTAT Appellants are paying 10% of deposit in addition to 7.5% deposit made before the first appellate authority. That in Kolkata Bench also, except the present Appellants, all other Appellants are making deposit of additional 10% deposit while appeal against first appellate authority under Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962. Shri K.Choudhary, Supdt.(AR) made the Bench go through para 8.2 of CBEC Circular dated 16.09.2014 to submit that Order of Commissioner(Appeals) includes the following in its preamble:-
An Appeal against this order shall lie before the Tribunal on payment of 10% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute.
4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether Appellants are required to deposit an additional 10% of duty confirmed, while filing Appeal before CESTAT against Orders passed by the first appellate authority [Commissioner(Appeals)] over and above 7.5% deposit made before the first appellate authority. The case of the Applicants in response to the defect memoranda issued by CESTAT Registry and during arguments is that only additional 2.5% of duty demanded is required to be deposited. Both sides have relied upon CBEC Circular dated 16.09.2014 as evidence on interpretation in their favour.
4.1 Section 35F(i) & 35F(iii) of the Central Excise Act, 1944, after its amendment from 06.08.2014 under Section 105 of the Finance Act, 2014, exists as follows:-
[SECTION 35F. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal. 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 [Principal Commissioner of Central Excise or Commissioner of Central Excise];
(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 : 4.2 It is observed from the case records that neither Section 35F(iii) of the Central Excise Act, 1944 nor CBEC Circular dated 16.09.2014 specifically mention whether 10% deposit required before Appeal is entertained should be inclusive or exclusive of 7.5% deposit made before the first appellate authority . It is a well known fact that success rate of departmental cases before the appellate authorities is very poor. That is the reason that percentage of deposit required to be made before the first appellate authorities is as low as 7.5% of the disputed amounts or penalties. After success at the level of first appellate authority may be Legislature wants that the case has passed one test of first appeal successfully and Revenue deserves an additional 10% of the duty or penalty as deposit till the issue is finally decided in the second appellate stage. In any case, Appellant is not at a loss in the above procedure of paying additional 10% of deposit, because in case Appellant wins then Appellant is eligible to interest from the date of deposit it made, as per Section 35FF of the Central Excise Act, 1944 or Section 129EE of the Customs Act, 1962, all introduced w.e.f. 06.08.2014. In case Appellant looses the case, then also Appellant will have to pay lesser interest for the period when amount was lying with the department as deposit.
4.3 Above observations will also hold good for the purpose of amended Section 129E of the Customs Act, 1962 as the provisions of deposit are made in Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962 are identical.
5. In view of the above it is held that Appellants were required to pay additional 10% deposit, under Section 35F(iii) of the Central Excise Act, 1944 or Section 129E(iii) of the Customs Act, 1962, in addition to 7.5% deposit made before the first appellate authority. Defect Memoranda were thus correctly issued by CESTAT Registry and all the above Appeals are dismissed for non-compliance of the requirement under Section 35F(iii) of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, as the case may be.
(Pronounced in the open court on 31.08.2016.)
SD/
(H.K.THAKUR) MEMBER(TECHNICAL)
sm
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Appeal Nos.E/75696, 75698, 75743, 75744, 75763, 75764, 75773/16, ST/75482/16, C/75880-75887/16