2012 (8) TMI 931 - HC - Central Excise

Court dismisses challenge due to petitioners' inaction and lack of pursuit. Rule discharged, no relief granted.

RAJKAMAL PRINTERY & 1 Versus UNION OF INDIA & 3

RAJKAMAL PRINTERY & 1 Versus UNION OF INDIA & 3 - 2017 (48) S.T.R. 452 (Guj.) Issues Involved:1. Legality of the pre-deposit order dated 12.03.2007.2. Legality of the dismissal of appeals on 06.06.2007 due to non-compliance with the pre-deposit order.3. Legality of the dismissal of the restoration application on 18.01.2012.Issue-wise Detailed Analysis:1. Legality of the Pre-deposit Order Dated 12.03.2007:The petitioners challenged the order dated 12.03.2007 from the Custom, Excise, and Service Tax Appellate Tribunal, which required them to deposit Rs. 50 lakhs each as a precondition for granting a stay on the duty and penalty imposed. The Tribunal had found that the petitioners wrongly claimed duty exemptions under notifications dated 28.02.1999 and 01.03.2000 for textile fabrics processed without the aid of power or steam. Investigations revealed that power was used in various processes, leading to a demand of Rs. 2,54,02,402/- and Rs. 2,65,20,218/- against the first and second petitioners, respectively, along with equivalent penalties under section 11AC of the Central Excise Act, 1944. The petitioners argued that they were financially incapable of making the deposit and that their property worth Rs. 65 lakhs had been attached, which should suffice as security. However, the Tribunal dismissed this argument, emphasizing the procedural necessity of the pre-deposit.2. Legality of the Dismissal of Appeals on 06.06.2007 Due to Non-compliance with the Pre-deposit Order:The appeals were dismissed on 06.06.2007 as the petitioners failed to comply with the pre-deposit order. The petitioners had initially challenged this dismissal by filing a Tax Appeal before the High Court, but it was dismissed on 04.07.2008 due to non-removal of office objections. The petitioners did not pursue the restoration of this appeal, effectively abandoning their challenge to the dismissal order. The High Court noted that the petitioners' inaction from 2007 to 2011, including their failure to pursue the statutory appeal, indicated a lack of seriousness in challenging the orders.3. Legality of the Dismissal of the Restoration Application on 18.01.2012:The petitioners filed a restoration application on 01.11.2011, claiming changed circumstances due to the attachment of their property and their financial inability to make the pre-deposit. The Tribunal dismissed this application on 18.01.2012, citing the petitioners' significant delay in filing the restoration application and their failure to provide a valid explanation for their inaction from 2007 to 2011. The High Court upheld the Tribunal's decision, noting that the petitioners' conduct suggested an attempt to delay and avoid compliance with the orders. The Court found that the petitioners' reliance on previous decisions where pre-deposit requirements were waived was misplaced, as those cases involved different facts and circumstances.Conclusion:The High Court dismissed the petition, finding no merit in the petitioners' arguments. The orders dated 12.03.2007, 06.06.2007, and 18.01.2012 were upheld. The Court emphasized that the petitioners' prolonged inaction and failure to pursue their statutory appeal indicated a lack of bona fide intent. The prayers to set aside the orders were neither well-founded nor well-conceived, and thus no relief was granted. The petition was dismissed, and the rule was discharged without any order as to costs.