Ease of Doing Business - Mandatory Pre-deposit for appealing to CESTAT - Tilted against small assessee
AS per Section 35F of the Central Excise Act, for appealing against an order of the Commissioner of Central Excise to the CESTAT, the assessee-appellant has to make a mandatory pre-deposit of 7.5% of the duty demanded. If the duty demanded is 4 crores, he has to make a pre-deposit of Rs. 30 lakhs, but if the demand is 400 crores, he need not deposit 7.5% that is 30 crores, as there is a ceiling of Rs. 10 crores. For an assessee with a demand of Rs. 400 crores, a deposit of 10 crores may not be difficult, but for the one with a demand of Rs. 4 crores, Rs. 30 lakhs may be a huge amount and he may not be in a position to raise this amount and has to face the sad situation of not being able to appeal at all. How will such an assessee continue in business? With ease or otherwise! And a demand of 4 crores or 400 crores does not make any difference for the Commissioner for him they are only figures.