In a recent case, the Kerala High Court dismissed the customs appeal due to the non compliance of predeposit condition under section 35 of the Central Excise Act, 1944.The bench directed the appellant to seek remedies available under the law.
Kumarakom Vadakkumbhagom Service Co-Operative Bank Ltd , theappellant, filed the Customs Appeal against the order dated 4.4.2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, Bangalore Bench, by which, the tribunal, noticing the fact that the appellant had not complied with the condition of pre-deposit as required under Section 35F of the Central Excise Act, 1944, rejected the appeal.
The appellant contended that a pre-deposit in an appeal before the tribunal can only be against a demand for tax, and since the appellant has no liability, there is no requirement for making any pre-deposit.
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On consideration of the submissions raised across the Bar, the court viewed that there is no merit in the contention of the appellant. The bench found that the demand of service tax plus penalty was raised against the appellant by an order dated 14.2.2019. The said order was challenged before the First Appellate Authority. The First Appellate Authority, by order dated 16.12.2019, rejected the appeal on the ground that the appellant has not made any pre-deposit as required under the Statute. It is against the rejection of the appeal that the appellant approached the Central, Excise and Service Tax Appellate Tribunal by preferring an appeal that was not numbered due to the same defect.
The bench viewed that theassertion of the appellant that the requirement of pre-deposit will arise only if there is a demand of tax and there is no liability for the appellant is untenable inasmuch as that a specific demand has been raised by the original authority. The sustainability or otherwise of the demand is the subject matter of the appeal, and therefore, going by the principles laid down by the Supreme Court in Chandra SekharJha vs. CCE [2022 ] the pre-deposit is a requirement for entertaining the appeal and therefore the order passed by the tribunal is correct.
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The counsel appearing for the appellant submitted that the appellant may be permitted to contest the matter on merits by payment of pre-deposit.
A division bench of Dr. Justice A.K. Jayasankaran Nambiar and Justice Easwaran S dismissed the appeal as it lacks merit and also held that the appellant can seek remedies available under the law.
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