[Central Excise Act] Mandatory Pre-Deposit U/S 35F For Filing Appeal Before CESTAT Can't Be Waived In Writ Jurisdiction: Allahabad High Court

The Allahabad High Court has held that mandatory condition of pre-deposit prescribed under Section 35F of the Central Excise Act for filing appeals before the Customs Excise and Service Tax Appellate Tribunal cannot be waived under Article 226 of the Constitution of India.

Petitioner approached the High Court against the order passed by the Commissioner, Central Goods and Service Tax, Ghaziabad. Alternatively, petitioner prayed for waiver of mandatory pre-deposit under Section 35F of the Central Excise Act while being relegated to appellate jurisdiction under Section 86 of the Finance Act, 1994.

Section 35F of the Central Excise Act mandates deposit of 7.5% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute when the order passed by Commissioner as the original adjudicating authority is being challenged in appeal.

The Court observed that the petitioner had already availed the remedy of appeal before Customs Excise and Service Tax Appellate Tribunal and the writ petition was filed as an afterthought to escape liability of payment of mandatory pre-deposit.

Counsel for petitioner had placed reliance on Ravi Gupta v. Commissioner of Sales Tax, Delhi and Another where the Supreme Court had waived pre-deposit. The Court observed that the case belonged to 2014 when amendments were being made in the Act.

The Court held that only in the regime where there was no mandatory requirement for pre-deposit, the Courts would interfere in writ jurisdiction by either waiving or reducing the pre-deposit. However, after amendment, the Court has no power to waive the mandatory requirement for pre-deposit in writ jurisdiction.

“If the High Courts were to interfere/tinker with the amount of pre-deposit to be deposited, the entire provision of pre-deposit would become otiose. It is to be noted that in the erstwhile period there was no clause of pre-deposit. In those circumstances, the High Court would, after going into the merits waive/reduce the pre-deposit. Such a position does not exists now, and therefore, there is no question of waver of the pre-deposit,” held Justice Shekhar B. Saraf.

The Court relied on Shri Subhash Jain v. Commissioner of Central Goods And Service Tax, where a division bench of the Allahabad High Court had refused to waive the pre-deposit under the Central Excise Act.

Accordingly, the writ petition was dismissed.

Case Title: Ram Kishan Bairwa vs. Central Excise Service Tax Appellate Tribunal And 2 Others 2024 LiveLaw (AB) 262 [WRIT TAX No. - 416 of 2024]

Case Citation: 2024 LiveLaw (AB) 262

Counsel for Petitioner: Shambhu Chopra, Sr. Advocate assisted by Mahima Jaiswal, Brijesh Verma

Counsel for Respondent: Parv Agarwal

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