Pre-deposit in an Appeal
The quantum of pre-deposit in an appeal under Section 35F of CEA,1944 and Section 129E of the Customs Act,1962 has had been a matter of dispute since the provisions of mandatory pre-deposit were introduced under the relevant acts w.e.f 06.08.2014.
Recently, the same issue was before Honourable CESTAT,Ahmedabad to decide on the quantum of pre-deposit while filing appeals before Tribunal.
Issue
Whether an appellant is required to deposit entire 10% amount in addition to deposit made earlier or only 2.5% after adjustment of the amount paid earlier before the first Appellate Authority, for filing an appeal before the tribunal.
Relied
The Honourable CESTAT while delivering its order vide A/11211-11213/2016 dated 24.10.2016 has relied upon the ratio of Honourable High Court of Bombay in the matter of Greatship(India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai-I 2015 (39) STR 754(Bom.). The most relevant portion is reproduced herein below :
……………………………It is further settled that an equitable construction, is not admissible in a taxing statute, where the Courts can simply adhere to the words of the statute. It is equally settled that a taxing statute is required to be strictly construed. Common sense approach, equity, logic, ethics and morality have no role to play while interpreting the taxing statute. It is equally settled that nothing is to be read in, nothing is to be implied and one is required to look fairly at the language used and nothing more and nothing less. No doubt, there are certain judgments of the Apex Court which also holds that resort to purposive construction would be permissible in certain situation. However, it has been held that the same can be done in the limited type of cases where the Court finds that the language used is so obscure which would give two different meanings, one leading to the workability of the Act and another to absurdity”
Held
The Honourable CESTAT under its order dated 24th October 2016 held that
4. In view of the above, we do not find substance in the argument that the amount paid under clause(i) of Sec.129E/35F which was paid at the time of filing Appeal before the first Appellate Authority can be adjusted against the amount of deposit required to be made under clause(iii) while filing the Appeal before this forum. In the result, the appeals are not entertained. MA disposed off.”
Conclusion
The ratio laid down by the Honourable CESTAT will have very wide implications both in pre GST and post GST phases .
The entire order is reproduced herein below :
2016 (10) TMI 946 – CESTAT AHMEDABAD
M/s Asr Multimetals Pvt Ltd, M/s Gokul Refoils & Solvent Ltd, M/s Aci Industrial Organic Pvt Ltd Versus Commissioner of Customs, Commissioner of Central Excise, Customs and Service Tax (Appeals)
Waiver of pre-deposit – 7.5% was deposited before filing an appeal before Commissioner (Appeals) – Now whether appellant is required to deposit entire 10% amount in addition to deposit made earlier or only 2.5% after adjustment of the amount paid earlier, for filing an appeal before the tribunal – Compliance of amended provision of Section 129E/35F of the Customs Act,1962/ Central Excise Act,1944 – interpretation of statute – Held that: – on reading of provisions it is found that the wordings employed there in is as clear as daylight. In clasue (iii) it is unambiguously prescribed that any person aggrieved by a decision or order referred to Clause (b) of sub- Section (1) of Sec 129A/35B of Customs Act/Central Excise Act, unless deposits 10% of the duty/penalty or duty and penalty, as the case may be, the appeal shall not be entertained. We do not find any reason to read the said provision in any other manner so as to come to the conclusion that the Appellants are required to deposit 2.5% and not 10% as prescribed under the said provision in view of the settled principle of statutory interpretation – reliance placed on the decision of Greatship(India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai-I [2015 (4) TMI 1006 – BOMBAY HIGH COURT] where it was held that it is settled position of law that in taxing statute, the Courts have to adhere to literal interpretation. At first instance, the Court is required to examine the language of the statute and make an attempt to derive its natural meaning. The Court interpreting the statute should not proceed to add the words which are not found in the statute. It is equally settled that a taxing statute is required to be strictly construed. Common sense approach, equity, logic, ethics and morality have no role to play while interpreting the taxing statute. It is equally settled that nothing is to be read in, nothing is to be implied and one is required to look fairly at the language used and nothing more and nothing less.
We do not find substance in the argument that the amount paid under clause(i) of Sec.129E/35F which was paid at the time of filing Appeal before the first Appellate Authority can be adjusted against the amount of deposit required to be made under clause(iii) while filing the Appeal before this forum – appeal dismissed – decided against appellant.
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