Kerala HC allows to make Mandatory Deposit of 7.5 % Service Tax to file Appeal before Commissioner of Central Excise (Appeals) u/s 35F of Central Excise Act [Read Order]

A Single Bench of Kerala High Court has allowed a mandatory deposit of 7.5% of tax to file an appeal before the commissioner of Central Excise (Appeals) under Section 35F of the Central Excise Act 2014.

This writ petition had been filed by Kaviyoor Service Co Operative Bank Ltd under Article 226 of the Constitution of India by the petitioner, a Co-operative Bank situated at Kaviyoor. An order originally dated 28.10.2021 was passed by the Assessing Authority. The demand of service tax, Swachh Bharat Cess and Krishi Kalyan Cess was confirmed under Section 73(2) of the Finance Act, 1994.

The penalty of the same amount being 100% of the service tax was also confirmed under Section 78 of the Finance Act. It was also provided that as per the proviso to Section 78 of Finance Act, if the assessee makes the payment of service tax and interest and penalty within a period of thirty days from the date of receipt of the order, the penalty payable under Section 78 would be 25% instead of 100%. The penalty was also imposed under Section 77(1) of the Finance Act and under Section 77(2) of the Finance Act.

Aggrieved by the said order in original, the petitioner filed an appeal before the Commissioner of Central Excise (Appeals), Ernakulam, under Section 85 of the Finance Act. However, the petitioner did not make mandatory deposit of the 7.5% of the tax assessed and therefore, the appeal came to be dismissed by order dated 23.08.2023 impugned in the present writ petition. The Appellate Authority has held that unless the condition of pre-deposit under Section 35F was not complied with, the appeal is not maintainable regardless of its merits.

K.N.Radhakrishnan for the petitioner submitted that the petitioner would comply with the mandatory requirements and deposit 7.5% of the tax within a period of ten days from today. If the petitioner deposits 7.5% of the demand in terms of Section 35F of the Central Excise Act, the appeal shall be heard and decided on merit. If there was any delay in filing the appeal, the application for condonation of delay also be considered in accordance with law.

A Single Bench of Justice Dinesh Kumar Singh relying upon the submissions of petitioner and giving liberty to petitioner disposed of the petition.

To Read the full text of the Order CLICK HERE

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