The proposed Section 35F compels an assessee to have endless
thoughts and hence I have tried to deal with some of them as
Query 1(a) Whether an assessee is supposed to file a stay
application along with an appeal before CESTAT?
Answer: Yes it is still required to be filed before appellate
authorities. However, in budget speech Honourable Finance Minister
has stated that
252. To expedite the process of disposal of appeals, amendments
have been proposed in the Customs and Central Excise Acts with a
view to freeing appellate authorities from stay applications and to
take up regular appeals for final disposal.
Whereas, even though stay application wont be heard then too
stay application is required to be filed in terms of sub section
(7) of Section 35 B of CEA,1944 which is produced herein below:
(7) Every application made before the Appellate Tribunal,
(a) in an appeal for grant of stay or for rectification of
mistake or for any other purpose; or
(b) for restoration of an appeal or an application,
shall be accompanied by a fee of five hundred rupees:
Unfortunately, the said provision was not amended in the current
budget and hence stay application is still required to be filed
with appropriate fees in CESTAT.
Query 1(b) How appeals and stay applications filed after
enactment of Section 35F shall be dealt by appellate
Answer : It is a dicey situation especially when the following
crucial aspect exists as below:
filing of stay application a
compulsion under sub section (7) of Section 35B of CEA,1944 and if
not filed then it will lead to deficiency
any application if filed is required
to be disposed and
mandatory pre-deposit for getting an
Under such situation, I feel that henceforth, the Registrar of
CESTAT will do something at par i.e
to check the compliance of mandatory
deposit under proposed Section 35F and
to dispose stay application filed
under 35B (7 )
by way of issuance an order for admission of an appeal
and thereby it shall be construed as disposal of stay application
In a case, where compliance of mandatory amount is not reported,
it shall pass an order for non-admission of an appeal.
Query 2: Whether extension of stay will be required for new
appeals and stay application filed after the enactment of proposed
Answer: No , it will not be required in as much as the first,
second and third provisions under sub-section (2) of Section 35C
will be omitted with the enactment of new provisions of finance
bill 2014. Therefore, vacation of stay under 180 days & another
365 days factor to decide an appeal will be talk of the past
In addition to the aforesaid, even otherwise, stay applications
wont be heard as narrated in query 1(a).
Query 3: Whether the pending stay applications
and appeal will have to follow the existing section 35F?
Answer: The answer is Yes. Since, the proposed section will not
be applicable to stay applications and appeals filed and/or pending
before the enactment of new Section 35F.
Therefore, any extension applications filed
before the enactment of proposed Section 35F will be the
last, in an appeal pending before the enactment, in as
much as the extension order passed, even after the enactment, will
be valid till disposal of an appeal due to the amendment in Section
35C as already explained in query 2.
Query 4 : Whether an amount deposited during an
investigation, after the issuance of a show cause notice or any
other time before the order of non appellate authority will be
sufficient for the purpose of mandatory deposit under the proposed
Answer : Yes. It shall be valid as the proposed Section 35F does
not speak for fresh deposit in addition to the deposits made during
an investigation, after the issuance of a show cause notice or any
other time before the order of non appellate authority. However, if
the total amount thus deposited is lesser to 7.5% and/or 10%, the
difference amount needs to be deposited so that it becomes total of
7.5% and /or 10% at respective appellate levels.
(Note – No part of this can be copied, reproduced and
taken, without the written consent of the author. This article is
meant for private circulation and its copyright vests with the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Cummins Inc. is a foreign company, rendering services in respect of desktop/laptop software license and internet mail facilities to its Indian associated enterprises, i.e. CIL and CSSL which were paying IT charges provided by the taxpayer.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).