No Waiver of Mandatory 7.5% Pre-Deposit for Excise Appeals Before CESTAT: Calcutta High Court
The Calcutta High Court has held that courts cannot waive the mandatory pre-deposit of 7.5% of the duty and penalty required under Section 35F of the Central Excise Act, 1944, for filing appeals before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
The bench of Justice Raja Basu Chowdhury also dismissed reliance on the Delhi High Court ruling in Mohammed Akman Uddin Ahmed, noting that the case addressed the constitutional validity of Section 129E of the Customs Act and did not dilute the statutory mandate of pre-deposit under excise law.
“The argument that the writ Court can waive the condition for payment of pre-deposit is unsustainable in law,” the bench said.
The petitioner/assessee is engaged in manufacturing MS ingots, which had sought exemption from the pre-deposit on grounds of financial hardship and business closure. The petitioner had challenged the orde by the adjudicating authority and approached CESTAT, Kolkata under Section 35B of the Central Excise Act, 1944.
The petitioner contended that although the provisions of Section 35F of the Central Excise Act, 1944 requires payment of pre deposit of 7.5 per cent of the duty in case where duty or duty and penalty are in dispute, or penalty where penalty is in dispute. Admittedly, in this case 7.5 per cent of both duty and penalty in terms of Section 35F is payable by the petitioner. However. the petitioner has closed down its business and is at present struggling and in the circumstances, he submits that this Court may be pleased to waive the mandatory pre deposit and direct the Tribunal to hear out the appeal.
The Court rejected the plea and ruled that the statutory requirement under Section 35F is absolute and non-negotiable. Citing a Division Bench judgment in Somnath Ray v. Additional Commissioner of Central Tax, the Court clarified that no appellate forum, including the Tribunal, can entertain an appeal unless the prescribed pre-deposit is made.
Case Details
Case Title: Mansarovar Ferrous Private Limited Versus Registrar, CESTAT & Ors.
Case No.: WPA 4021 of 2025
Date: 16.06.2025
Counsel For Petitioner: Lalitendra Gulani, Souvik Das
Counsel For Respondent: Bhaskar Prosad Banerjee, Tapan Bhanja
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
