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Futura Polymers Ltd V/S Commissioner of Central Excise, Chennai-I

    Appeal Nos. E/41820, 41821/2017 (Arising out of Order-in-Original No. 14 & 15/2016 dated 10.6.2016 passed by the Principal Commissioner of Central Excise, Chennai-I) and Final Order Nos. 40225-40226/2018

    Decided On, 29 January 2018

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai

    By, THE HONORABLE JUSTICE: SULEKHA BEEVI C.S.
    By, MEMBER AND THE HONORABLE JUSTICE: B. RAVICHANDRAN
    By, MEMBER

    For Petitioner: M. Kannan, Advocate And For Respondents: R. Subramaniyan, AC (AC)



Judgment Text


1. The above appeal is filed by the appellant. The appellant has not made the pre-deposit as mandated under section 35F of the Central Excise Act.

2. The ld. counsel Shri M. Kannan appearing for the appellant submitted that the company remains closed from 29.12.2012 and the appellant's liability to bank and its employees stand to the tune of more than Rs. 200 crores and they are not able to comply with the mandatory pre-deposit. He also submitted that the Central Excise authorities have attached the land of the appellant which is valued at Rs. 110 crores. He submitted that taking into account the value of the property attached by the Central Excise authorities, the mandatory pre-deposit may be waived.

3. Heard the ld. AR for Revenue.

4. After hearing both sides, we find that compliance of mandatory pre-deposit stands settled by the decision of the Hon'ble Madras High Court in the case of Dream Castle Vs. Union of India reported in : 2016 (43) STR 25 (mad.), wherein the Hon'ble High Court observed as under:-

34. Drawing our attention to the decision in R. Rajagopal Reddy v. Padmini Chandrasekharan : AIR 1996 SC 238], the learned senior counsel further contended that where a statutory provision which has not made retrospective by the legislature seeks to affect the vested rights and corresponding obligations of parties, such provision cannot be said to have any retrospective effect by necessary implication. The Supreme Court quoted Maxwell to the effect that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment.

35. The next decision relied upon by the learned senior counsel for the writ petitioner is that of a Division Bench of this Court in The Deputy Commercial Tax Officer v. Cameo Exports : 2006 (3) CTC 81]. In that case, the Division Bench of this Court was concerned with the effect of an amendment made to the Tamil Nadu General Sales Tax Act, 1959, by the amendment Act 14 of 1999. Prior to the amendment, the assessees were obliged only to pay the tax admitted by them, for filing statutory appeals. But, after the amendment, a mandatory pre-deposit of 25% of the difference between the tax assessed and admitted became mandatory. Therefore, two questions were taken up for consideration by the Division Bench. They were (i) whether the right of an assessee to file an appeal is a substantive right? and (ii) whether such a right get crystalised at the time of initiation of assessment proceedings?

36. After taking note of the decision of the Supreme Court in Hoosein Kasam Dada as well as the decision of the Constitution Bench in Garikapatti Veeraya, this Court held in Paragraph 25 as follows:

In view of the foregoing discussion, we hold that the crucial date on which the right of the assessees to prefer an appeal under Section 31 or Section 36 of the Act is the date on which the returns are filed under the Act. In all these appeals, returns were filed long prior to the date when the provisions of Section 31 of the Act was amended by virtue of Act 14 of 1999. Furthermore, it is not disputed by the parties that the aforesaid amendments to the Act have not been given retrospective effect as and from an anterior date and those amendments are prospective. Therefore, the appeals are liable to be entertained without insisting of pre-deposit of 25% of the disputed tax as per the amended provisions of the Act.

37. In K. Rama Mohanarao & Co. v. Union of India : 2015 TIOL 511 HC AP : 2015 (321) E.L.T. 195 (A.P.)], a Division Bench of the Andhra Pradesh

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High Court was concerned with a writ petition challenging the very validity of the amendment to Section 35F under the Finance Act 2 of 2014. While ordering notice in the writ petition, the Division Bench of the Andhra Pradesh High Court took a preliminary view that the writ petition raised two issues, namely (a) the vires of the amendment, and (b) the retroactivity of the amendment. On the second point, the Andhra Pradesh High Court took a view that the amendment may not be applicable to cases where a show cause notice had been issued before the coming into force of the amendment and where the lis had started before the amendments. The case appears to be pending before the Andhra Pradesh High Court.

38. The interim order passed by the Andhra Pradesh High Court in K. Rama Mohanarao & Co. was followed by a learned Judge of the Kerala High Court in two cases, namely (i) Muthoot Finance Ltd. v. Union of India: 2015 TIOL 632 HC Kerala : 2015 (38) S.T.R. 1133 (Ker.) : 2015 (320) E.L.T. 51 (Ker.)] and (ii) Secretary to Government, Department of Agriculture v. Union of India : 2015 TIOL 895 HC Kerala : 2015 (40) S.T.R. 438 (Ker.)]. In an interim order passed by a Division Bench of the High Court of Punjab and Haryana in Super Threading (India) Pvt. Ltd. v. Union of India : 2015 (323) E.L.T. 119 (P & H)], the decision of the single Judge of the Kerala High Court in Muthoot Finance Ltd. was followed.

39. However, a Division Bench of the Allahabad High Court struck a different note in Ganesh Yadav v. Union of India : 2015 (39) S.T.R. 177 (All.) : 2015 (320) E.L.T. 711 (All.)]. In the said case, the Allahabad High Court was dealing with a writ petition challenging the very vires of the amendment. After pointing out in Paragraph 4 of its decision that as a first principle of law, the right of appeal is a statutory right and that it is always open to the legislature which confers a remedy of appeal to regulate the same subject to compliance of certain conditions, the Bench took note of the decisions of the Supreme Court to the effect that the right of appeal is neither an absolute right nor an ingredient to natural justice. Since it is only a statutory right, it can always be circumscribed by the condition in the grant. Therefore, the Court upheld the constitutional validity of the Finance Act 2 of 2014.

40. Thereafter, the Allahabad High Court took up for consideration the next question which is exactly identical to the question that is raised in the present case. After taking note of the decision of the Privy Council in Colonial Sugar Refining Co. Ltd., the decision of the Supreme Court in Hoosein Kasam Dada and the decisions of the Supreme Court in Jose Da Costa v. Bascora Sadasiva Sinai Narcornim : (1976) 2 SCC 917] and Ramesh Singh v. Cinta Devi : AIR 1996 SC 1560], the Allahabad High Court held in Paragraphs 19 and 20 as follows:

19. Parliament while substituting the provisions of Section 35F of the Central Excise Act, 1944 by Finance Act (No. 2) of 2014, has laid down that the Tribunal or the Commissioner (Appeals) shall not entertain any appeal unless the appellant has deposited the duty or, as the case may be, a penalty to the stipulated extent. These words in Section 35F of the Act would indicate that on and after the enforcement of the provision of Section 35F of the Act, as amended, an appellant has to deposit the duty and penalty as stipulated and unless the appellant were to do so, the Tribunal shall not entertain any appeal. This provision would, therefore, indicate that it would apply to all appeals which would be filed on and from the date of the enforcement of Section 35 of the Act.

20. The intendment of Section 35F of the Act is further clarified by the second proviso which stipulates that the provisions of the section shall not apply to stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act, 2014. The second proviso is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F(1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act, 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after the enforcement of the amended provision on 6 August, 2014 shall be governed by the requirement of pre-deposit as stipulated therein. The only category to which the provision will not apply that would be those where the appeals or, as the case may be, stay applications were pending before the appellate authority prior to the commencement of Finance (No. 2) Act, 2014.

41. Mr. Joseph Prabhakar, learned counsel for the respondent/assessee in the writ appeal contended that in Winwind Power Energy Private Limited v. Commissioner of Central Excise : 2013 TIOL 863 Madras : 2015 (324) E.L.T. 111 (Mad.)], a learned Judge of this Court was concerned with a situation where the time limit for filing an appeal was reduced by an amendment to Section 85 of the Finance Act, 1994. Since the amendment came into force on 28-5-2012, the learned Judge held that the same (the reduced period of limitation) would not apply to appeals arising out of the orders passed by the original authority before the date of coming into force of the amendment.

42. Mr. Joseph Prabhakar, learned counsel also brought to our notice a decision of the Division Bench of the Delhi High Court in Bajaj Overseas Impex v. Special Commissioner : 2013 (62) VST 397]. The said case arose out of a dispute with regard to the applicability of the third proviso to Section 74(1) of the Delhi Value Added Tax Act, 2004, inserted by way of an amendment with effect from 1-10-2011. Following the long line of decisions from Hoosein Kasam Dada up to the decision of the Division Bench of this Court in Cameo Exports, the Delhi High Court held that since the returns were filed much prior to the introduction of the third proviso to Section 74(1), the proviso would have no applicability. Incidentally, the proviso inserted by the amendment, made the pre-deposit, a condition precedent for considering an objection. Such a condition was not in force earlier.

43. But, a Division Bench of the Gujarat High Court took a different view in Premier Polyspin Pvt. Ltd. v. Union of India : 2015 TIOL 1265 HC : 2015 (322) E.L.T. 349 (Guj.)]. In that case, the Gujarat High Court was concerned with the very same amendment to Section 35F of the Central Excise Act with which we are concerned even in this case. Though the Gujarat High Court did not go into greater details, the Court held in Paragraph 4 as follows:

There are two aspects of the matter. First, in our opinion, during the pendency of proceedings or after the order passed by the adjudicating authority, if the law is amended and a condition of pre-deposit is also amended in Section 35F of the Central Excise Act, the appellant would have to comply with the provisions as the amended provisions would apply to all the appeals which are filed after coming into force of the amended Act. It is not disputed by learned counsel for the petitioner that he has filed the appeal after the amendment was made in Section 35F of the Central Excise Act. Therefore, the amended provisions would apply and the appeal of the appellant before the CESTAT would not be maintainable in absence of deposit of an amount equivalent to 7.5% of the confirmed amount of duty liability. The other aspect of the matter is that if the argument of the learned counsel for the petitioner is accepted then he is required to pre-deposit 100% of the excise duty levied on him as he has not filed any waiver application under the old provision before the Tribunal exempting him from making any pre-deposit. The Legislature has granted benefit to the assessees by fixing pre-deposit equivalent to 7.5% or 10% of the confirmed amount of duty liability as per the provisions of Section 35F of the Central Excise Act, 1944. Therefore, we do not find any illegality in the impugned order passed by the Tribunal.

44. A view similar to the one taken by the Gujarat High Court in Premier Polyspin Pvt. Ltd. had already been taken in two decisions of the Rajasthan High Court. In Paramount Security v. Union of India [W.P. No. 12232 of 2015], one Division Bench of the Rajasthan High Court recorded an opinion that the effect of the amendment cannot be restricted only to those appeals which are filed after 6-8-2014. The Court proceeded on the footing that the amendment was actually beneficial to the assessee and hence, the Bench held that to restrict such a benefit only to one category of assessees would be violative of Article 14. The Court held that the amended provisions will apply even to those orders which were passed before the amendment came into force.

45. Though the opinion rendered in Paramount Security was only a prima facie opinion rendered at the stage of ordering notices, the same was followed by two decisions of the Rajasthan High Court, one in D.B. Central Excise Appeal Nos. 1 to 7 of 2015, by order dated 12-2-2015 and another in Arjun Industries Ltd. v. Commissioner of Customs : 2015 (320) E.L.T. 497 (Raj.) : 2015 (39) S.T.R. 3 (Raj.)].

46. In State of Bombay v. Supreme General Films : 1960 (3) SCR 640], a suit that was decreed on 22-7-1954 was taken on appeal to the High Court on 4-9-1954. The Court fee on the appeal was paid under the Court Fees (Bombay Amendment) Act, 1954 that had come into force on 1-4-1954. The appellant claimed a refund of excess Court fee on the ground that the suit was instituted on 16-4-1953 and hence, the Court fee as prevailing at that time alone was payable even on the appeal, despite the fact that the decree itself was passed only on 22-7-1954, after the amendment came into force. The Supreme Court upheld the said contention by holding that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only and that it impairs or imperils a substantive right and hence, an enactment which does so is not retrospective unless it says so expressly or by necessary intendment .

47. The aforesaid decision in Supreme General Films was followed by the Supreme Court in Ramesh Singh v. Cinta Devi : 1996 (3) SCC 142]. In Ramesh Singh, an application for compensation was filed on 23-12-1988 in respect of an accident that took place on 27-5-1988. But, by then, the Motor Vehicles Act, 1988 came into force repealing 1939 Act. The claim for compensation was allowed on 29-6-1992 and an appeal was filed on 25-9-1992. A Division Bench of the High Court rejected the appeal on the ground that a pre-deposit as required by the new Act had not been made. But, the decision of the High Court was reversed by the Supreme Court holding that the right of appeal will crystallise in the appellant on the institution of the application in the Tribunal of first instance and that vested right of appeal will not be dislodged by the new Act .

48. But, it appears that in all the decisions either of the High Courts or of the Supreme Court, there has been no reference to another Constitution Bench of the Supreme Court in Hardeodas Jagannath v. State of Assam : AIR 1970 SC 724]. The said case arose out of the Assam Sales Tax Act, 1947, as amended by Act 6 of 1958. Under the said Act, an appeal against an order of assessment or penalty cannot be entertained by the authority unless the amount of tax assessed or penalty levied had been paid. The provisions of the Assam Sales Tax Act, 1947, were extended to the Administered Area in Shillong under Section 4 of the Extra Provincial Jurisdiction Act, 1947, by a notification issued by the Government of India on 15-4-1948. In the case before the Supreme Court, the period of assessment was prior to the date of coming into force of Act 6 of 1958. But, the orders of assessment and penalty were passed after 1-4-1958, the date of coming into force of the amendment. The assessee contended that the amended Act 6 of 1958 could not be given retrospective effect so as to apply to assessment periods anterior to that date. Prior to the amendment, Section 30 contained a proviso requiring the assessee to pay only the admitted amount of tax as a pre-condition for entertaining the appeal. But, the Supreme Court held that when the orders of assessment were completed only after the coming into force of the amendment and when the appeals themselves were filed only after the amendment, it is not correct to say that the amended Act had been given retrospective effect.

49. Though the decision in Hardeodas Jagannath did not go into greater details on questions relating to vested right and statutory right, the decision was nevertheless by a Constitution Bench and that too rendered long after the decisions in Hoosein Kasam Dada and Garikapatti Veeraiah. Though the decisions in Hoosein Kasam Dada and Garikapatti Veeraya were of the years 1953 and 1957 respectively, they were not taken note of by the Constitution Bench in Hardeodas Jagannath, decided in 1970.

50. Interestingly, the conflict between the Constitution Bench decisions and Hoosein Kasam Dada and Garikapatti Veeraya on the one hand and the Constitution Bench in Hardeodas Jagannath was brought to the notice of a Full Bench of the Punjab and Haryana High Court in Indo Swiss Times Ltd. v. Umrao [1981 PLR 335]. The Full Bench of the Punjab High Court held that in the event of two directly conflicting judgments of the Supreme Court and of equal authority, the judgment which appears to lay down the law more elaborately and accurately is required to be followed. Therefore, the Full Bench followed the decisions in Hoosein Kasam Dada and Garikapatti Veeraya.

51. As a consequence, when a situation similar to the one on hand arose under the Haryana VAT Act, 2003, before the Punjab and Haryana High Court, the Court held that the right of appeal is a vested right and that it existed on the date of commencement of the lis. Therefore, the Court held in Khazan Chand Nathi Ram v. State of Haryana : (2004) 136 STC 261] that the provisions, as they existed prior to the amendment, would continue to govern the right of appeal vested in the assessee and that the same was saved in terms of Section 4 of the General Clauses Act, 1898.

52. For arriving at the above conclusion, the Punjab and Haryana High Court relied upon the decision of the Supreme Court in Vittalbhai Naranbhai Patel's case : AIR 1967 SC 344], to the effect that the relevant date to find out the applicability of the governing law would be the date on which the cause of action arose.

53. Despite all the conflicts, sometimes latent, sometimes patent and sometimes incorrigible, there has been uniformity of opinion at least on one thing, namely that the right of appeal is neither an absolute right, nor an ingredient of natural justice, and that it is only a statutory right which can be circumscribed by the conditions in the grant. A useful reference can be made in this regard to the decisions in Seth Nand Lal v. State of Haryana : 1980 (Supp.) SCC 574] and Vijay Prakash D. Mehta v. Collector of Customs : (1988) 4 SCC 402 : 1989 (39) E.L.T. 178 (S.C.)].

54. Therefore, it is well settled that the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory.

55. Therefore, the question of prime importance that arises is, as to whether a switchover from a regime where the deposit of the entire duty was mandatory subject however to the discretion granted to the Appellate Authority to waive the whole or any part of it, to a regime where a fixed percentage of 7.5% of the demand is made mandatory, can be said to be more onerous or less onerous. This question appears to have been answered in Shyam Kishore v. Municipal Corporation of Delhi: (1993) 1 SCC 22], by a three Member Bench of the Supreme Court, though not directly, but indirectly. In Paragraph 38 of the decision, the Supreme Court stated as follows:

The decisions of the Bombay and Calcutta High Courts earlier referred to: AIR 1980 Bom. 162 and Chatter Singh : AIR 1984 Cal. 283) have upheld the validity of a provision banning the entertainment of an appeal altogether where the taxes are not paid. However, the Supreme Court decisions in Anant Mills : 1975 (2) SCC 175], Vijay Prakash Mehta: 1988 (4) SCC 402] and A.S. Bava : AIR 1968 SC 13] had occasion to consider only the vires of a milder provision which permitted the Appellate Authority to waive or relax the condition of deposit. As explained in Seth Nand Lal v. State of Haryana, these decisions settle the principle.

That the right of appeal is a creature of a statute and there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory.

56. Let us now conceive of different types of pre-deposit conditions that are capable of being imposed for entertaining a statutory appeal. In a graded scale they will be as follows:

(i) A condition which makes it mandatory for the assessee to deposit the whole of the disputed tax or penalty or both can be said to be the most onerous;

(ii) A condition that makes it mandatory for the assessee to deposit the entire amount of disputed tax, penalty or both with a discretion to the Appellate Authority to grant waiver of the whole or part of the amount can be said to be less onerous than the first; and

(iii) A condition that the assessee should deposit at least the admitted amount of tax, could be said to be less onerous.

57. That leaves us only with one more type of condition namely the condition to make a pre-deposit of a fixed percentage of the tax demanded or penalty levied or both. The answer to the question raised in this writ petition lies squarely in our answer to the question as to whether the condition of this nature requiring the assessee to make a pre-deposit of 7.5% could be placed in between the categories narrated in (i) and (ii) or in between categories narrated in (ii) and (iii) above. If this condition falls in between categories (i) and (ii), it is more onerous than the existing condition and hence, cannot take retrospective effect. If this condition falls in between categories (ii) and (iii), it is less onerous than the existing condition and hence, the question whether it is retrospective or not will not even be raised by those who are benefited by it.

58. The issue could also be looked at from another angle. Whenever an amendment (i) does not take away a right of appeal, or (ii) does not impose an additional condition for the exercise of the right of appeal, the parties can have no cause to complain. In Osram Surya (P) Ltd. v. Commissioner of Central Excise: 2002 (142) E.L.T. 5 (S.C.)], the Supreme Court was concerned with an amendment to the Central Excise Rules, 1944. Prior to 29-6-1995, Rule 57G of the said Rules entitled a manufacturer to withdraw the Modvat credit at any time without there being any limitation. But, by an amendment which came into effect on 29-6-1995, the second proviso to Rule 57G was introduced. By the new proviso, a period of limitation of six months was introduced for a manufacturer to take credit. When it was argued that the amendment took away a vested right, the Supreme Court distinguished its earlier decision in Eicher Motors Ltd. v. Union of India : 1999 (106) E.L.T. 3] and held that the mere imposition of a restriction with regard to the exercise of a right, without taking away such a right, would not tantamount to a retrospective amendment. The Court held that the second proviso inserted by way of amendment did not take away the right, but merely restricted the period available for a manufacturer for the exercise of such a right.

59. Therefore, if one condition that was already available in the statute for the exercise of a right of appeal, is merely replaced by another condition, the same cannot be said to be retrospective, unless it is definitely shown that the amended condition is more onerous than the unamended condition. When the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right. A mere chance of convincing the Appellate Authority to exercise the discretion for the grant of a total waiver is no vested right. The amendment, in our considered view, did not take away a right vested, but merely made a chance divested. What has now gone, is not the right, but the chance or hope. Therefore, the first contention of the learned Senior Counsel for the petitioner is liable to be rejected.

60. The second contention of the learned Senior Counsel for the writ petitioner revolves around the legal effect of a proviso. We have already extracted the amended Section 35F in a tabular column given in Para 19 above.

61. There are two provisos to the amended Section 35F. The first proviso states that the amount required to be deposited under the new Section, shall not exceed Rs. 10 crores. The second proviso states that the provisions of this Section shall not apply to the stay applications and appeals pending before any Appellate Authority prior to the commencement of Finance Act 2 of 2014.

62. Taking clue from the second proviso, the Allahabad High Court held in Para 20 of its decision in Ganesh Yadav that the appeals filed on or after the commencement of the amended provision on 6-8-2014 shall be governed by the requirement stipulated therein. In other words, the second proviso excluded certain types of cases from the purview of the amendment and the Allahabad High Court came to the conclusion that cases which do not fall within such exclusions, should be taken to be covered by the amended provision.

63. Therefore, it is sought to be contended by Mr. C. Natarajan, learned Senior Counsel appearing for the writ petitioner that a proviso carving out an exception, need not necessarily be an indicator that what is not covered by the exception, will fall within the general Rule. In support of such a contention and in order to drive home the manner in which a proviso is to be interpreted, the learned Senior Counsel relied upon certain decisions which we shall now consider.

64. In Madras and Southern Mahratta Railway Company Limited v. Bezwada Municipality : AIR 1944 Privy Council, 74], the Judicial Committee of the Privy Council opined that the proper function of a proviso is to accept and deal with a case which would otherwise fall within the general language of the main enactment and its effect confined to that case. Where the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication, what clearly falls within its express terms.

65. In Commissioner of Income Tax v. Krishna Warriar : AIR 1965 SC 59], the Supreme Court held that it is not always an inflexible rule of construction that a proviso in a statute should always be read as a limitation upon the effect of the main enactment. Though generally the presumption would be that but for the proviso the enacting part of the Section would have included the subject matter of the proviso, in some cases the clear language of the substantive provision as well as the proviso may indicate that both of them were substantive provisions.

66. In S. Sundaram Pillai v. R. Pattabiraman : AIR 1985 SC 582], the Supreme Court reiterated that though normally a proviso is an exception to the main part of the Section, it could, in exceptional cases, be a substantive provision by itself. Quoting from its earlier decision in Dwarka Prasad v. Dwarka Das Saraf : 1976 (1) SCR 277, the Court pointed out that a proviso should be limited in its operation to the subject matter of the enacting clause and that to expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction. In Para 43 the Court summarized the four different purposes that may be served by a proviso, as follows:-

43. We need not multiply authorities after authorities on this point because the legal position seems to be clearly and manifestly well established. To sum up, a proviso may serve four different purposes:

(1) qualifying or excepting certain provisions from the main enactment;

(2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable;

(3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and

(4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision.

67. In Ali M.K. v. State of Kerala : AIR 2003 SC 4006], the Supreme Court quoted with approval the opinion rendered by the Privy Council in Jinnings v. Kelly - 1940 AC 206, to the effect that a proviso cannot be used to import into the enacting part, something which is not there. But where the enacting part is susceptible to several possible meanings, it may be controlled by the proviso.

68. In the light of the principles of law laid down in the above decisions, it is contended by Mr. C. Natarajan, learned Senior Counsel that the second proviso cannot be taken to curtail the effect of the substantive provision and that the second proviso cannot also be taken to cover all cases that do not come within the purview of the substantive provision.

69. But unfortunately, all the above contentions of the learned Senior Counsel revolving around the effect of the second proviso, overlook one important aspect. The Allahabad High Court did not say in Ganesh Yadav that the second proviso is a complete code in so far as cases that would not fall within the purview of the substantive provision. While interpreting the substantive provision, the Allahabad High Court drew inspiration from the second proviso to come to the conclusion that the substantive provision was capable of interpretation only one way. Otherwise, there could have been no necessity for the second proviso at all.

70. In any case, on the first contention of the writ petitioner, we have independently come to a conclusion that even the substantive provision of Section 35F, after its amendment, is not capable of any other interpretation. Our conclusions on the first contention was not on the basis of the second proviso. Therefore, we need not even find out whether the second proviso is exhaustive about the exclusions, or whether the second proviso is a substantive provision in itself or the extent to which the second proviso would control the substantive provision. Hence, the second contention of the petitioner is also rejected.

71. The third contention of the learned Senior Counsel for the writ petitioner is that the High Courts of Andhra Pradesh and Telangana and Kerala have taken a view that the amendment is prospective in nature and that it would apply only to proceedings originally initiated on or after 6-8-2014.

72. The decision of the High Court of Andhra Pradesh relied upon by the learned Senior Counsel in K. Rama Mohanarao is only a prima facie view. We have already analysed this decision while dealing with the first contention. Similarly, the decision of the Kerala High Court in Muthoot Finance Limited has also been analysed in great detail by us. With great respect to these Courts, we have not agreed with the view taken by them, for the reasons that we have indicated in great detail while dealing with the first contention. Therefore, the third contention is also rejected.

73. The contention of Mr. Joseph Prabhakar, learned counsel for the assessee/respondent in the writ appeal, based upon sub-sections (3) and (3A) of Section 85 of the Finance Act, 1994 and the interpretation given to the same by this Court in Winwind Power Energy Private Limited, does not appeal to us. The curtailment of a period of limitation, by way of amendment, takes away a vested right of appeal. An amendment that takes away the right of appeal stands on a different footing from an amendment that merely changes the condition precedent for the filing of the appeal.

74. Mr. Joseph Prabhakar, learned counsel, also advanced arguments on the basis of two Circulars dated 16-9-2014 and 5-1-2015. In Para 1.2 of the Circular dated 16-9-2014, it was stated that the amended provisions would apply to appeals filed after 6-8-2014 and that Section 35F of the Central Excise Act and Section 129E of the Customs Act, contain specific saving clauses providing that all pending appeals/stay applications filed till the enactment of the Finance Bill shall be governed by the erstwhile provisions.

75. On the ground that the aforesaid Para 1.2 of the Circular dated 16-9-2014 created some confusion, the second Circular dated 5-1-2015 was issued. Para 4 of the second Circular reads as follows:-

4. Para 1.2 of the Circular ibid stated that amended provisions would apply to appeals filed after 6th of August, 2014. An Act of Parliament comes into effect on the date it received the assent of the President of India. Hence, the amended provisions regarding filing of appeal along with stipulated percentage of pre-deposit shall apply to all appeals filed on or after 6th August, 2014. Para 1.2 of the earlier Circular stands suitably modified.

76. We do not know how the above passage goes to the rescue of the assessees. The argument of the assessees in the cases on hand is that the amendment would apply only to the proceedings that commence with the issue of show cause notices on or after 6-8-2014. In other words, the contention of the writ petitioner before us is that if a show cause notice had been issued on 5-8-2014, the amended provisions will not apply to an order-in-original passed in pursuance of the same, even if such an order is passed after 6-8-2014. The above Circular does not support this contention of the petitioner.

77. Lastly it is contended by Mr. Joseph Prabhakar that the assessees do not stand to gain by fighting on pre-deposit condition. If they lose the battle after exhausting all avenues, the assessees are obliged to pay the amount due, together with interest at a higher rate. Therefore, it is his contention that a provision that grants a temporary reprieve to the assessees need not necessarily be interpreted in such a harsh manner.

78. But we do not agree. In fact the assessees should be more happy that they are not thrown at the mercy of the Appellate Authorities for considering the question of waiver of pre-deposit condition. The law now fixes a standard rate, applicable to all persons uniformly, without subjecting the assessees to the vagaries of weather prevailing in the offices of the Appellate Authorities/Tribunals.

79. We have actually come across several cases where the Tribunal has granted waiver of different percentages in cases of identical nature, without any rhyme or reason. In fact this Court is burdened with appeals both under Section 35G of the Central Excise Act and Section 130 of the Customs Act, against the orders of the Tribunal granting or refusing to grant waiver. Therefore, the amendment to the provision has actually taken away the possibility of an arbitrary exercise of power and along with it, the threat of multiplicity of proceedings even at the stage of waiver applications.

80. Therefore, we are of the considered view that the writ petition in W.P. No. 13431 of 2015 seeking a declaration that the amended Section 35F of the Central Excise Act, 1944, is applicable only to show cause proceedings initiated on or after 6-8-2014 is liable to be dismissed. Accordingly it is dismissed. There will be no order as to costs.

81. In so far as the writ appeal is concerned, the order-in-original was passed on 27-2-2015 and the assessee challenged it before this Court without exhausting the alternative remedy of appeal. But in the course of the hearing of the writ petition, the assessee seems to have agreed to go before the Appellate Authority and sought a clarification that the amendment would not apply to his case. The learned Judge agreed with the said contention and allowed the assessee to file an appeal along with an application for waiver without making a pre-deposit of 7.5% as per the amendment. The interpretation given by the learned Judge to the amendment, is not correct. Hence, the appeal of the Commissioner of Service Tax is liable to be allowed. Accordingly, W.A. No. 1424 of 2015 is allowed, the order of the learned Judge is set aside. It is open to the respondent to canvass the appeal on all grounds except the effect of the amendment. There will be no order as to costs.

5. Following the same, we are of the view that the appellant has to comply with the mandatory pre-deposit. The appeal is therefore dismissed
O R