In a recent ruling, the CESTAT, Ahmedabad Bench held that under the provisions of section 129E of the Customs Act, 1962, the amount of pre-deposit paid before the first appellate authority cannot be adjusted towards the deposit to be paid while filing appeal before the CESTAT. Consequently, the appellant will have to pay 7.5% of the entire duty/penalty payable before the first appellate authority on first appeal and a separate 10% while filing second appeal before the Tribunal.
In the instant case, the appellant impugned the order of the first appellate authority before the CESTAT. The Registry noted a defect that as the appellants have failed to deposit 10% of the duty/ penalty in terms with the amended provision of Section 129E/35F of the Customs Act,1962/ Central Excise Act,1944. At the Bar, the appellant contended that since they had deposited 7.5% at first appellate stage, before the Commissioner(Appeals), they are required to deposit the balance 2.5% and not the entire 10%. The Revenue, on the other hand, argued that such an interpretation cannot be read into the said provision without inserting words not present therein.
While accepting the contentions of the Revenue, the Tribunal observed that the amount paid under clause(i) of Sec.129E/35F at the time of filing Appeal before the first Appellate Authority cannot be adjusted against the amount of deposit required to be made for filing appeal before the Tribunal.
The division bench quoted the observation of the Bombay High Court in Greatship(India) Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai , 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 if the person sought to be taxed comes within the letter of the law he must be taxed, however, great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. 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.”
Read the full text of the order below.
