Appeal Maintainable Upon Compliance with Mandatory Pre-Deposit under Section 35F of Central Excise Act: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that an appeal cannot be rejected on the ground of non-compliance with mandatory pre-deposit requirements under Section 35F of the Central Excise Act, 1944, where such compliance is already established on record.

The appeal was filed against an order passed by the Commissioner of Service Tax (Appeals-III), Chennai, whereby the appeal was dismissed as not maintainable on the ground of alleged non-compliance with the pre-deposit requirement under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994.

The appellant, represented by counsel G. Mathanghi, submitted that the Commissioner (Appeals) had rejected the appeal solely on the ground of non-fulfilment of pre-deposit conditions without adjudicating the matter on merits. It was further submitted that in compliance with the Interim Order, the appellant had deposited ₹3,00,000 on 22.02.2013, proof of which was placed before the Tribunal. The appellant also pointed out that an amount of ₹6,78,101 had already been deposited on 01.06.2012, which was substantially in excess of the mandatory requirement under Section 35F of the Central Excise Act.

The Departmental Representative, M. Selvakumar, reiterated the findings recorded in the impugned order and supported the rejection of the appeal.

The Bench comprising Vasa Seshagiri Rao (Member – Technical) and Ajayan T.V. (Member – Judicial) observed that Section 35F of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, mandates pre-deposit as a condition for entertaining appeals before the appellate authority.

Upon examination of the records, the Tribunal noted that the appellant had already made substantial deposits prior to and pursuant to the interim order, thereby satisfying the statutory requirement of pre-deposit. Despite this, the Commissioner (Appeals) rejected the appeal on the ground of alleged non-compliance, without appreciating the actual deposits made.

The Tribunal held that such rejection, ignoring the material available on record and the compliance demonstrated by the appellant, is unjustified and cannot be sustained in law. It further observed that once the statutory condition of pre-deposit is satisfied, the appeal must be considered on merits in accordance with law.

Accordingly, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) with a direction to decide the appeal on merits after affording due opportunity of hearing and following the principles of natural justice.

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