By TIOL News Service

CHENNAI, MAY 13, 2014: PETITIONER filed an appeal and stay petition before Commissioner (Appeals) against order in original and prayed for waiver of the deposit of excise duty. Commissioner (Appeals) passed an interim order under Section 35F of Central Excise Act, 1944, directing them to make a pre-deposit of 50% of the duty for proceeding with the hearing of the appeal under Section 35B of Central Excise Act, 1944.

Aggrieved, the petitioner challenged the interim order passed by the Commissioner (Appeals) under Section 35F of Central Excise Act, 1944, in a Writ Petition before the High Court. The Department Counsel raised a preliminary objection with regard to the maintainability of the writ petition on the ground that the impugned order is appealable under section 35B and relied upon the decision of the division bench of the Madras High Court in WP No 24615 of 2012 batch 2013-TIOL-865-HC-MAD.

The Madras High Court had in Metal Weld Electrodes Vs. CCE 2013-TIOL-865-HC-MAD, held that orders of the CESTAT passed under Section 35F of the Central Excise Act, 1944 are appealable in terms of Section 35G of the Excise Act, 1944 and accordingly held that Writ Petitions challenging orders passed by CESTAT under Section 35F of the Central Excise Act, 1944, are not maintainable.

In the present case, the High Court, however held that the decision in Metal Weld Electrodes would not apply to orders passed by Commissioner (Appeals) under Section 35F of Central Excise Act, 1944. The Court held that Section 35B virtually lists out the orders against which an appeal would lie to the CESTAT and an order passed under Section 35F is not included as one of the orders under Section 35B. Further the High Court held that Section 35B, does not use the expression "any'' or ‘'every order'' and on the contrary, Section 35G uses the expression "every order''.

The High Court further held that it is a fundamental principle of law that the statutory authorities derive powers of appeal only in terms of statutes and if the statutes do not clearly confer power of Appeal, they cannot be conferred through interpretation and ruled that writ petitions are maintainable as against orders of Commissioner (Appeals) passed under Section 35F of Central Excise Act, 1944.

As regards pre-deposit, the High Court held that it is not fair for Commissioner (Appeals) to direct pre-deposit where the CESTAT had granted stay in two cases earlier on the same issue and accordingly set aside the interim order and directed the Commissioner (Appeals) to dispose of the appeal on merits.

Please also see: 2014-TIOL-305-CESTAT-DEL

(See 2014-TIOL-716-HC-MAD-CX)