Pre-Deposit Mandatory for Excise Appeal u/s 35 F: Calcutta HC Allows to Pay Default Pre Deposit

The Calcutta High Court allowed the assessee to pay the mandatory pre-deposit for appeal under section 35Fof the Central Excise Act, 1944.

M/s Active Ads, the petitioner filed an appeal before the Commissioner, Central Goods and Services Tax (CGST) and CX (Appeal). The appeal requires a pre-deposit of 7.5% of the duty demanded in terms of Section 35F of the Central Excise Act, 1944 as applicable in service tax under the provisions of Section 83 of the Finance Act, 1994.

The petitioner was, required to pay a sum of Rs.2,30,949/-, being 7.5% of the demand, i.e. Rs.30,79,330/-. The Commissioner of Appeal rejected the appeal by an order dated 28th March 2023 only on account of failure to pay the mandatory pre-deposit.

On behalf of the respondents (CGST Authorities), it was submitted that several letters were issued to the petitioner to deposit the amount as required under Section 35F of the Central Excise Act, 1944, but the petitioner wilfully failed and deliberately neglected to deposit the money. The appeal was dismissed only on the ground of the failure of the petitioner to make the pre-deposit.

Justice Arindam Mukherjee observed set aside the order and directed the petitioner to deposit the pre-deposit amount required under the provisions of Section 35F of the Central Excise Tax, 1944 within a period of ten daysso that the Commissioner of Appeal can hear out the appeal on merits.

Further held that “the petitioner shall deposit a sum of Rs.2,30,949/- within 12th May 2023, failing which the order dated 28th March 2023 shall revive and the appeal shall stand dismissed. In the event, the amount is deposited in terms of this order, the Commissioner of Appeal, Siliguri Appeal Commissionerate, shall hear the appeal on merits. “

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