By TIOL News Service

NEW DELHI, JULY 10, 2014: IN a significant amendment to Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962, the Finance Bill 2014(No 2), proposed a statutory pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (Appeals) or the Tribunal at first stage and another 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The maximum pre-deposit is Rs 10 crores.

The new provisions will certainly put rest to the divergent judgements on the issue of validity of stay orders beyond 180/365 days and the power of Tribunal to extend the same beyond the statutory time limit.

This will also ease the workload in Tribunal as substantial time is spent on hearing and disposal of stay applications and the final disposal of the appeals is taking a long time. With more time at its disposal, the Tribunal will now be able to hear and dispose the appeals quickly.

But, the provisions likely to cause some confusion as the phrase “duty demanded or penalty imposed or both” can be interpreted in different ways.