M/S Vish Wind Infrastructure LLP vs. Additional Director General (Adjudication), New Delhi

Facts

The petitioners, M/s Vish Wind Infrastructure LLP and M/s J.N. Investment & Trading Co. Pvt. Ltd., filed writ petitions challenging an order dated January 29, 2019, passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The CESTAT had directed the petitioners to deposit 7.5% of the service tax demand confirmed against them by the Additional Director General (Adjudication), Director General of GST Intelligence. The petitioners argued that the amendment to Section 35F of the Central Excise Act, 1944, which mandated this pre-deposit, occurred after the period of dispute. The respondent was the Additional Director General (Adjudication). The amount in dispute is the service tax demand confirmed by the ADG(Adjudication). The procedural history involves the CESTAT's order requiring pre-deposit, which led to the present writ petitions.

Held

The Court held that the amended Section 35F of the Central Excise Act, 1944, requiring a pre-deposit of 7.5% of the duty demand, is applicable to appeals filed after August 6, 2014, even if the dispute arose prior to that date. The Court reasoned that the judgment in Anjani Technoplast Ltd. v. Commissioner of Customs, which dealt with a similar issue and was upheld by the Supreme Court, established this principle. The Supreme Court's dismissal of the appeal in Anjani Technoplast meant that the High Court's judgment merged with the Supreme Court's order, making it binding under Article 141 of the Constitution. The Court emphasized the peremptory language of Section 35F, stating there is an absolute bar on the CESTAT entertaining appeals without the mandatory pre-deposit, except for the specific relaxations provided in the provisos. The Court found no substance in the petitioners' plea and dismissed the writ petitions. However, the time for pre-deposit was extended to November 15, 2019, with the condition that if deposited by then, the appeals before CESTAT would be restored and heard on merits.

Key Issues

1. Whether the amended Section 35F of the Central Excise Act, 1944, requiring a pre-deposit of 7.5% of the duty demand or penalty, is applicable to appeals where the dispute arose prior to the amendment's effective date of August 6, 2014? (Question of law) Petitioner's contention: The petitioner argued that since the period of dispute predated the amendment to Section 35F, they should not be subjected to the new pre-deposit requirement. They relied on decisions that might have supported this view, such as Pioneer Corporation, Manoj Kumar Jha, and Shubh Impex. Respondent's contention: The respondent contended that the amended Section 35F, as substituted by the Finance (No.2) Act, 2014, is applicable to appeals filed after August 6, 2014, irrespective of when the dispute arose. They relied on the judgment of this Court in Anjani Technoplast Ltd. v. Commissioner of Customs, 2015 (326) ELT 472 (Del.), which was subsequently upheld by the Supreme Court, thereby merging with the Supreme Court's order.