Metal Weld Electronics vs Customs, Excise and Service Tax Appellate Tribunal

R. Sudhakar, J.—A number of writ petitions have been filed challenging the interlocutory orders passed by the Customs, Excise and Service Tax Appellate Tribunal (for brevity, "the CESTAT") regarding pre-deposit of duty/penalty pending the appeals, inter alia, contending that the undue hardship and prima facie case have not been considered by the Tribunal while disposing of the applications/petitions filed u/s 35F of the Central Excise Act, 1944 (for brevity, "the Excise Act") or section 129E of the Customs Act, 1962 (for brevity, "the Customs Act"), which are the two provisions relating to pre-deposit of duty/penalty pending the appeals. The writ petitions are filed despite there being a provision for an appeal u/s 35G relating to the Excise Act and section 130 in relation to the Customs Act, stating that the orders under challenge passed by the CESTAT are not orders passed in the appeals, but only interlocutory orders in terms of section 35F of the Excise Act and section 129E of the Customs Act and, therefore, the writ petitions under article 226 of the Constitution of India are maintainable.

The above said contention is repelled and objected to by the Revenue stating that as against such interlocutory orders, appeals would lie and in this regard reliance is placed on a decision of the Supreme Court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, wherein in paragraph 18, it was held as under:--

The argument that u/s 35 only appeals from final order can be filed has been advanced on a misconception of the clear provision of the section itself. The section clearly says that from ''any decision or order'' of the Appellate Tribunal, appeal can be filed to the High Court on a question of law.

In addition to a number of writ petitions that have been filed challenging the interlocutory orders being passed by the CESTAT, it is to be noticed that different High Courts which are dealing with such matters have treated this issue differently giving rise to some confusion as to whether the interlocutory order passed by the CESTAT is appealable or not. In this regard, it will be appropriate to refer to the following decisions:--

(i) A Division Bench of the Bombay High Court comprising Dr. D.Y. Chandrachud and A.A. Saved, JJ in Orange City Alloys Pvt. Ltd. Vs. Commr. of Cus. and C. Ex., Nagpur, while considering an appeal against an order passed by the CESTAT on an application for waiver of pre-deposit formulated substantial questions of law as under:

Before we proceed to deal with the rival contentions, we admit the appeals on the following substantial questions of law:--

(a) Whether in the facts and circumstances of the case, the Tribunal was justified in directing the appellants to deposit 50 per cent. of the duty amount and 25 per cent. of the penalty amount?

(b) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the appellants did not make out a prima facie case for total waiver of pre-deposit?

and passed the following order:--

For the reasons indicated above, we direct that the appellants shall make a pre-deposit of 25 per cent. 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. Vs. Customs, Excise and Service Tax Appellate Tribunal and Commissioner of Customs and Central Excise, , 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. The relevant portion of the said order reads as under (page 481 of 9 GSTR):--

Section 35F under which the order for pre-deposit has been directed to be made reads as follows:--

35F. Deposit, pending appeal, of duty demanded or penalty levied.--Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central excise authorities or any penalty levied under this Act the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied.

Now considering the aforesaid two provisions the question arises as to whether the order directing a party to deposit the amount before the Appellate Tribunal is an order made in appeal and if the answer is in the affirmative, whether an appeal lies u/s 35G of the Central Excise Act, 1944. We have no hesitation in holding that an order directing the deposit of the amount is an order made in appeal. Section 35F opens with the words ''where in any appeal under this Chapter''. The order of deposit is thus an order made in appeal. In fact there is no other proceeding pending before the appellate authority. In fact there are no separate proceedings which deal with the issue of deposit. Any order for deposit must be said to have been made in an appeal only. Therefore, where such an order is made, it will be an order from which the appeal will lie u/s 35G of the Central Excise Act.

(iii) In yet another case reported in Mukesh Garg Vs. Commissioner of Customs and Central Excise, Noida, a Division Bench of the Delhi High Court comprising A.K. Sikri and M.L. Mehta, JJ. entertained the appeals against the interlocutory orders passed by the CESTAT u/s 35F of the Excise Act in a case of pre-deposit and modified the order passed by the CESTAT. Though no question of law was framed, the order-in-appeal at paragraph (4) of the said order reads as follows:

On the strength of these orders passed by other Co-ordinate Benches of the Tribunal itself, we are of the opinion that the appellants have made out a strong prima facie case in their favour and in the given circumstances, they were entitled to the waiver of pre-deposit of the penalty. We, thus, set aside the order of the Tribunal in so far as it relates to directing the appellants to make pre-deposit of 25 per cent. of the respective penalties imposed upon them and direct the Tribunal to hear the appellants without such pre-deposit. Since, a short question of law is involved, we also expect the Tribunal to decide these appeals expeditiously.

(iv) In Commissioner of Central Excise, Mangalore Vs. Hml Agencies (P) Ltd, , 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 2010 (177) ECR 22 , while deciding an appeal filed against an order passed by the CESTAT in exercise of the power under the proviso to section 129E of the Customs Act corresponding to section 35F of the Excise Act, observed as follows (page 17 of 13 GSTR):--

We are also not very convinced that in respect of an order of this nature, an appeal u/s 130A can be maintained before the High Court, which is only in a situation where the appeal involves examination of a substantial question of law which is decided erroneously by the Tribunal.

(vi) A Division Bench of the Kerala High Court comprising C.N. Ramachandran Nair and K. Surendra Mohan, JJ. in Mohd. Fariz and Co. Vs. Commissioner of Customs, 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 u/s 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. Vs. The Commissioner of Customs, , while considering an appeal filed against an order of pre-deposit passed by the CESTAT, after formulating the question of law as follows (page 203 of 10 GSTR):

Whether on the facts and in the circumstances of the case, the Tribunal is justified in directing the appellant to make pre-deposit of rupees five crores for entertaining the appeal, when, in respect of similar appeals filed by the appellant in the past, the Tribunal had granted full waiver of pre-deposit?

held that there is no bar for the court to entertain an appeal u/s 130 of the Customs Act in the following words:

The decision of the apex court in the case of Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, and the decision of this court in the case of Indoworth (India) Ltd. Vs. Union of India (UOI), on which strong reliance was placed by Mr. Jetly, are distinguishable on the facts. In the case of Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, the question was, whether a party aggrieved by an interim order passed by the Appellate Tribunal under the Foreign Exchange Management Act, 1999 can file an appeal before the High Court u/s 35 of the Foreign Exchange Management Act, 1999 or not. The apex court, held that u/s 35 of the Foreign Exchange Management Act, an appeal is maintainable before the High Court even against the interlocutory order. It is relevant to note that section 35 of the Foreign Exchange Management Act, 1999 does not provide for any exclusion whereas section 130 of the Customs Act, 1962 provides that the appeals against certain orders would not be maintainable before the High Court. Therefore, the decision of the apex court in the case of Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, relating to section 35 of the Foreign Exchange Management Act, 1999 would have no relevance in the present case. Similarly, the decision of this court in the case of Indoworth (India) Ltd. Vs. Union of India (UOI), would have no relevance to the facts of the present case. In these circumstances, in our opinion, the order of pre-deposit passed by the Tribunal cannot be said to be a ''determination of any question having a relation to the rate of duty of customs or to the value of goods'' so as to bar the jurisdiction of this court to entertain the appeal against the order of pre-deposit u/s 130 of the Customs Act, 1962. Accordingly, we reject the preliminary objection raised by the Revenue regarding the maintainability of the appeal before this court.

(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 Induslnd Bank Ltd. v. Commissioner of Service Tax (judgment dated June 24, 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, and observed as follows:--

...That apart, this being a discretionary order in nature and requires only a prima facie consideration on merits of the case, none of the substantial questions of law raised in the appeal could be considered and, consequently, the appeal could be entertained.

Accordingly, the civil miscellaneous appeal fails and the same is dismissed. Consequently, connected miscellaneous petition is also dismissed. As the time given by the Tribunal for pre-deposit of Rs. 20 lakhs expired on June 13, 2011, the said time is extended for a further period till July 15, 2011.

The Division Bench did not think it fit to entertain the appeal on merits.

(ix) On the contrary, in Arafaath Travels P. Ltd. v. Union of India (Order dated December 3, 2010 made in W.P. No. 25638 of 2010), by relying upon the decision of the Supreme Court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, Chitra Venkataraman J. directed the registry to convert the writ petition into civil miscellaneous appeal. That case also relates to an order passed by the CESTAT in relation to pre-deposit pending appeal. In the said order, it was observed as follows:--

It is seen from the decision of the apex court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, in Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement, the proper course for the petitioner would be instead of resorting to writ jurisdiction, the petitioner has to prefer an appeal u/s 35F of the Central Excise Act. In the circumstances, the registry is directed to convert the writ petition as civil miscellaneous appeal and post it before the tax appeal Bench. In the meantime, the interim order already granted is extended till the civil miscellaneous appeal is listed before the Division Bench.

The petitioner is hereby directed to frame the questions of law in the civil miscellaneous appeal.

(x) In Vijay Plas Fabs (P) Ltd. Vs. Cestat, Chennai, 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 Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another,

(xi) A Division Bench of the Delhi High Court in the case of Himgiri Plastics Vs. Commissioner of Central Excise, considered an appeal against the interlocutory order of the CESTAT by framing the following question of law (page 20 of 13 GSTR):

Whether the Customs, Excise and Service Tax Appellate Tribunal is right in directing the appellant to deposit Rs. 70 lakhs as a pre-condition for hearing of the appeal vide the order dated March 28, 2011?

and modified the order under challenge.

On a perusal of the above orders, it is clear that there is bound to be an element of confusion in the mind of the assessees, as different courts are adopting different yardsticks to entertain the case challenging the interlocutory order passed by the CESTAT.

It is stated by M/s. S. Venkatachalam, Mohammed Shaffiq, S. Sivanandam, S. Lokaiah, S. Jaikumar, Mr. Premkumar for M/s. King and Partridge, V. Balasubramanian, N. Viswanathan, S. Ramachandran and K.V. Subramanian, learned counsel for the petitioners as well as M/s. P. Mahadevan, Vikram Ramakrishnan, E. Vijay Anand, S. Haja Mohideen Gisthi, K. Rajasekar, V. Sundareswaran, N. Senthil Kumar, S. Thirumavalavan, T. Chandrasekaran, S. Xavier Felix, learned standing counsel for the respondents that in a number of cases writ petitions are filed challenging the orders of the CESTAT passed in interlocutory applications in terms of section 35F of the Excise Act or section 129E of the Customs Act and in many occasions disposed of by the writ court on the merits. In some cases, there has been a direction to file appeal. It is also stated that very recently writ petitions in W.P. Nos. 6245 and 6246 of 2013 have been entertained by a Bench of this court, wherein the orders of the CESTAT relating to pre-deposit were challenged.

Considering the manner in which the interlocutory orders passed by the CESTAT have been dealt with by different courts and the number of writ petitions that have already been filed and pending before this court, I am of the considered opinion that some clarity is required as to whether an appeal would lie against the order passed by the CESTAT u/s 35F of the Excise Act or section 129E of the Customs Act.

This issue assumes importance in the light of the decisions of this court directing the writ petitions to be converted into civil miscellaneous appeals by placing reliance on Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, Nevertheless, this court entertains a doubt as to whether the said decision of the apex court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another, , would apply to the orders passed by the CESTAT in terms of section 35F of the Excise Act or section 129E 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 relation to orders passed under sections 35F of the Excise Act or section 129E of the Customs Act, in contrast to an order passed in appeal u/s 35C of the Excise Act or section 129B of the Customs Act.

While considering the above said provisions, due regard should be had to the provisions of different enactments, as under:--

FEMA, 1999.

Excise Act.

Customs Act.

Provisions related to filing of appeals.

Appeal to the High Court.--Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order:--

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.--In this section ''High Court'' means--

(a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and

(b) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.

Section 35G. Appeal to High Court.--(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law.

(2) The Commissioner of Central Excise or the other party aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be--

(a) filed within one hundred and eighty days from the date on which the order appealed against is received by the Commissioner of Central Excise or the other party;

(b) accompanied by a fee of two hundred rupees where such appeal is filed by the other party;

(c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved.

(2A) The High Court may admit an appeal after the expiry of the period of one hundred and eighty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.

(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.

(4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:--

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.

(5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit.

(6) The High Court may determine any issue which--

(a) has not been determined by the Appellate Tribunal; or

(b) has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in subsection (1).

(7) When an appeal has been filed before the High Court, it shall be heard by a bench of not less than two judges of the High Court, and shall be decided in accordance with the opinion of such judges or of the majority, if any, of such judges.

(8) Where there is no such majority, the judges shall state the point of law upon which they differ and the case shall, then, be heard upon that point only by one or more of the other judges of the High Court and such point shall be decided according to the opinion of the majority of the judges who have heard the case including those who first heard it.

(9) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section.

Section 130. Appeal to High Court.--(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law.

(2) The Commissioner of Customs or the other party aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be--

(a) filed within one hundred and eighty days from the date on which the order appealed against is received by the Commissioner of Customs or the other party;

(b) accompanied by a fee of two hundred rupees where such appeal is filed by the other party;

(c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved.

(2A) The High Court may admit an appeal after the expiry of the period of one hundred and eighty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.

(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.

(4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:--

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.

(5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit.

(6) The High Court may determine any issue which--

(a) has not been determined by the Appellate Tribunal; or

(b) has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in subsection (1).

(7) When an appeal has been filed before the High Court, it shall be heard by a bench of not less than two judges of the High Court, and shall be decided in accordance with the opinion of such judges or of the majority, if any, of such judges.

(8) Where there is no such majority, the judges shall state the point of law upon which they differ and the case shall, then, be heard upon that point only by one or more of the other judges of the High Court and such point shall be decided according to the opinion of the majority of the judges who have heard the case including those who first heard it.

(9) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908) relating to appeals to the High Court, shall as far as may be, apply in the case of appeals under this section.

Section 35 of the Foreign Exchange Management Act, 1999 (FEMA, 1999) provides for an appeal against any decision or order of the Appellate Tribunal, whereas section 35G of the Excise Act and section 130 of the Customs Act state that the appeal will lie to the High Court from every order passed in the appeal. These appeals are filed as against the orders passed by the Tribunal in terms of section 35C of the Excise Act or section 129B of the Customs Act. In both the provisions, the Tribunal is empowered to confirm, modify or annul the decision or order appealed against. It, therefore, follows that it is a final order passed in the appeal. There is, however, a distinction between the order passed u/s 35F of the Excise Act or section 129E of the Customs Act and the final orders passed u/s 35C of the Excise Act or section 129B of the Customs Act. Section 35G of the Excise Act and section 130 of the Customs Act provide that the appeal should be on questions of law to be formulated in a decision rendered in the appeal. It would apparently mean the main issue in the appeal.

The question that arises for consideration is whether the interlocutory order passed by the CESTAT in terms of section 35F of the Excise Act or section 129E of the Customs Act would be an order passed on merits in the appeal. In my opinion, the interlocutory order passed u/s 35F of the Excise Act or section 129E of the Customs Act considers only prima facie case and undue hardship and the CESTAT is entitled to balance the interest of the assessee and the Revenue. The main issue raised in the appeal is not decided one way or the other and, therefore, it can at best be an interlocutory order not touching upon the merits of the appeal. The Acts provide for interlocutory remedy pending the appeal. The order-in-appeal passed u/s 35C of the Excise Act or section 129B of the Customs Act goes into the merits of the contentions raised and the claim of the assessee is determined on facts by the Tribunal, which is the highest forum to assay the facts. Therefore, the statute provides for an appeal by formulating substantial questions of law. This distinction is not there in the FEMA, 1999. As earlier pointed out, the statutory provisions should be considered in the light of that particular statute, vide K.T.M.S. Mohd. and another Vs. Union of India, .

It is to be noticed that there is no provision in the FEMA, 1999 which is akin to section 35F of the Excise Act or section 129E of the Customs Act. All that the CESTAT is required to consider at the time of hearing an application u/s 35F of the Excise Act or section 129E of the Customs Act is the undue hardship of the assessee and the interest of the Revenue. It is not a decision rendered on the merits of the appeal itself. It has to be taken note of that the provision for appeal was inserted by the Finance Act, 2003 by deleting the provision for reference and the appeal was to be considered on substantial questions of law.

It is also to be noticed that unless the threshold of section 35F of the Excise Act or section 129E of the Customs Act is crossed, the question of taking up the appeal u/s 35G of the Excise Act or section 130 of the Customs Act does not arise. The said decision rendered by the CESTAT in terms of section 35F of the Excise Act or section 129E of the Customs Act is a decision or order pending appeal. If that conditional order is not complied with, the appeal itself will be dismissed. Therefore, it is to be considered whether the order passed by the CESTAT in the interlocutory application can be considered as a final decision in appeal so as to enable the court to consider the same in terms of section 35G of the Excise Act or section 130 of the Customs Act. It is to be emphasised that in contrast to section 35 of the FEMA, 1999, sections 35G of the Excise Act or section 130 of the Customs Act does not state that an appeal would lie to the High Court from any decision or order, as in the case of section 35 of the FEMA, 1999. An appeal would lie against every order-in-appeal can mean an order-in-appeal which decides the issue on merits finally.

The provisions of section 35C of the Excise Act deal with orders of Appellate Tribunal and the said provision reads as under:--

35C. Orders of Appellate Tribunal--(1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.

(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:--

Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.

(2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under subsection (1) and shall make such amendments if the mistake is brought to its notice by the Commissioner of Central Excise or the other party to the appeal:--

Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.

(2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed:--

Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order:--

Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.

(3) The Appellate Tribunal shall send a copy of every order passed under this section to the Commissioner of Central Excise and the other party to the appeal.

(4) Save as provided in the National Tax Tribunal Act, 2005, orders passed by the Appellate Tribunal on appeal shall be final.

The above said provision provides that after an order of stay is made, the appeal should be disposed of within 180 days from the date of such order. It is, therefore, evident that the application for stay or waiver of pre-deposit is not an order passed on merits in the appeal. The appeal is pending final decision. Furthermore, section 35C(4) of the Excise Act states that the order passed u/s 35C(1) of the Excise Act is final. If that is the case, we may have to consider as to whether the order passed u/s 35F of the Excise Act or section 129E of the Customs Act will be a final order-in-appeal, against which an appeal alone would lie.

Yet another distinction is that section 35B of the Excise Act provides for an appeal to the Appellate Tribunal and in that an application is filed u/s 35F of the Excise Act for waiver of pre-deposit or for stay. What is filed u/s 35B of the Excise Act is a memorandum of appeal and what is filed u/s 35F is an application for waiver of pre-deposit or stay. Section 35B(6) of the Excise Act provides the manner in which an appeal should be presented, whereas section 35B(7) of the Excise Act provides the manner in which an application should be filed in the appeal. Therefore, there is a distinction between the two in the statutory provision itself. This distinction is absent in the FEMA, 1999. At this juncture, it may be relevant to take note of the decision of the apex court in K.T.M.S. Mohd. and another Vs. Union of India, wherein it is observed as under (page 211 of 197 UK):--

Needless to emphasise that the FERA and the income tax Act are two separate and independent special Acts operating in two different fields.

As a consequence, it has to be considered as to whether the decision rendered in the case of the FEMA 1999 would be applicable to the provisions of the Excise Act and the Customs Act when there is a clear distinction in the manner in which the interlocutory order should be considered and the manner in which the final order-in-appeal should be disposed of by the Tribunal.

In view of the above, the question that has to be considered is whether an order passed by the CESTAT in terms of section 35F of the Excise Act or section 129E of the Customs Act would be an order against which an appeal would lie. As stated earlier, there is enough confusion in different courts as to how such an order should be dealt with. There has to be a clarity to a person approaching this court as to which is the correct forum. There cannot be an element of doubt with regard to the forum to which a person is entitled to approach under the statute.

The reason for seeking a clarification from the larger Bench will also be justified as in the case of Commissioner of Central Excise, Mangalore Vs. Hml Agencies (P) Ltd, the Revenue itself has filed a writ petition against the interlocutory orders before the Karnataka High Court. This only adds credence to the issue raised herein. For the foregoing reasons, I am inclined to direct the registry to place the matter before the hon''ble 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 35F of the Excise Act or section 129E of the Customs Act is appealable in terms of section 35G of the Excise Act or section 130 of the Customs Act.