By TIOL News Service

CHENNAI, MAY 20, 2013: RECENTLY, Madras High Court was disposing a number of Writ Petitions filed against the Interlocutory orders of the Tribunal directing the appellants to pre-deposit certain amount as pre-condition for hearing the main appeals under Section 35-F of the Central Excise Act, 1944 or Section 129-E of the Customs Act, 1962. During the course of proceedings, the Bench noted that there is lot of confusion on the issue of whether such orders are appealable under respective Acts or should be challenged by way of a Writ Petition under Article 226 of the Constitution in view of the following decisions:

i . A Division Bench of Bombay High Court comprising Dr.D.Y.Chandrachud and A.A.Sayed,JJ . in Orange City Alloys Pvt. Ltd. v. Commissioner of Customs and Central Excise, Nagpur, 2011-TIOL-950-HC-MUM-CX , while considering an appeal against an order passed by the CESTAT on an application for waiver of pre-deposit passed the following order:

"14. For the reasons indicated above, we direct that the Appellants shall make a pre-deposit of twenty five per cents of the demand for duty. We dispense with the deposit of penalty. The pre-deposit shall be effected within a period of six weeks from today. The order of the Tribunal shall stand modified to that extent. The questions of law shall stand answered accordingly. On the request of learned Counsel for the Appellants, we clarify that the observations in this order are confined to the disposal of the appeal which is against an order passed by the Tribunal on an application for waiver of pre-deposit. The appeal shall be heard and disposed of by the Tribunal without treating these observations as a conclusive opinion of the Court on the merits of the rival contentions at the hearing of the appeal. The Appeal is disposed of in these terms. There shall be no order as to costs."

ii. Similarly , in Indoworth India Ltd. v. CESTAT, Mumbai, (2010-TIOL-261-HC-MUM-CX), a Division Bench of the Bombay High Court comprising S.A.Bobde and P.D.Kode , JJ. declined to entertain a writ petition on the ground that an appeal alone will lie.

iii. In yet another case reported in Mukesh Garg v. Commissioner of Customs and Central Excise, Noida , 2011-TIOL-949-HC-DEL-CX , a Division Bench of the Delhi High Court comprising A.K.Sikri and M.L.Mehta , JJ. entertained appeals against the interlocutory orders passed by the CESTAT under Section 35-F of the Excise Act in a case of pre-deposit and modified the order passed by the CESTAT.

iv. In Commissioner of Central Excise v. HML Agencies (P) Ltd., 2012-TIOL-298-HC-KAR-ST , a Division Bench of the Karnataka High Court comprising N.Kumar and Ravi Malimath , JJ. dismissed on merits a writ petition filed by the Commissioner of Central Excise challenging an order passed by the CESTAT in an application for waiver of pre-deposit.

v. However, a Division Bench of the very same High Court comprising D.V.Shylendra Kumar and H.S.Kempanna , JJ. in Hindustan Petroleum Corporation Ltd. v. Commissioner of Customs, Mangalore, ( 2012-TIOL-155-HC-KAR-CUS ) , while deciding an appeal filed against an order passed by the CESTAT in exercise of the power under the proviso to Section 129-E of the Customs Act corresponding to Section 35-F of the Excise Act, observed that appeal under Section 130A cannot be maintained.

vi . A Division Bench of the Kerala High Court comprising C.N.Ramachandran Nair and K.Surendra Mohan, JJ. in Mohd . Fariz and Co. v. Commissioner of Customs, 2010-TIOL-906-HC-KERALA-CUS , while taking up an appeal against the order passed by the CESTAT dismissing an application for condonation of delay filed along with the appeal, was of the view that an order rejecting an appeal after dismissing an application filed for condonation of delay is not an order in appeal against which an appeal would lie to the High Court under Section 130 of the Customs Act.

vii . A Division Bench of the Bombay High Court comprising J.P.Devadhar and R.M.Savant , JJ. in Videocon Industries Ltd. v. Commissioner of Customs, Aurangabad, 2010-TIOL-787-HC-MUM-CUS , while considering an appeal filed against an order of pre-deposit passed by the CESTAT, held that there is no bar for the Court to entertain an appeal under Section 130 of the Customs Act.

viii . As far as our High Court is concerned, a Division Bench comprising D.Murugesan,J . (as His Lordship then was) and K.K.Sasidharan,J . in IndusInd Bank Ltd. v. The Commissioner of Service Tax (Judgment dated 24.6.2011 in C.M.A.No.1613 of 2011), while dealing with an appeal filed against the order passed by the CESTAT on an application seeking waiver of pre-deposit on service tax, declined to entertain the appeal on merits.

ix. On the contrary, in Arafaath Travels Pvt. Ltd. v. Union of India and others (Order dated 3.12.2010 made in W.P.No.25638 of 2010), by relying upon the decision of the Supreme Court in Raj Kumar Shivhare , supra, Chitra Venkataraman,J . directed the Registry to convert the writ petition into Civil Miscellaneous Appeal.

x. In Vijay Plas Fabs (P) Ltd. v. CESTAT, Chennai, 2010-TIOL-905-HC-MAD-CX , a writ petition filed challenging the order of the CESTAT in relation to pre-deposit was directed to be converted into Civil Miscellaneous Appeal by K.B.K.Vasuki,J . by placing reliance on Raj Kumar Shivhare case, supra.

xi . A Division Bench of the Delhi High Court in the case of Himgiri Plastics v. Commissioner of Central Excise, (2012-TIOL-88-HC-DEL-CX) considered an appeal against the interlocutory order of CESTAT

In view of the above divergent views, the Bench opined that there is lot of confusion prevailing on the issue because of the manner in which the interlocutory orders passed by the CESTAT have been dealt with by different Courts and some clarity is required as to whether an appeal would lie against the order passed by the CESTAT under Section 35-F of the Excise Act or Section 129-E of the Customs Act.

With regard to the High Courts allowing conversion of writ petitions into Civil Miscellaneous Appeals by placing reliance on Raj Kumar Shivhare case - (2010-TIOL-29-SC-FEMA) , the High Court doubted whether the said decision of the Apex Court, would apply to the orders passed by the CESTAT in terms of Section 35-F of the Excise Act or Section 129-E of the Customs Act, as the provisions of Foreign Exchange Management Act, 1999 (FEMA, 1999) is slightly different from the scope of the Excise Act and the Customs Act.

In view of the above, the High Court directed the Registry to place the matter before the Chief Justice for referring the matter to an appropriate Bench for deciding the issue as to whether the order passed by the CESTAT in terms of Section 35-F or the Excise Act or Section 129-E of the Customs Act is appealable in terms of Section 35-G of the Excise Act or Section 130 of the Customs Act.

(See 2013-TIOL-415-HC-MAD-CX)