2014 (5) TMI 127 - HC - Central Excise

Appeal Dismissed Due to False Claims on Duty Payment

Met Trade India Ltd. Versus Commissioner Central & Custom Office, Jammu

The appeal challenging the final order under the Central Excise Act, 1994 was dismissed by the Tribunal due to the appellant's false claims regarding the ... Duty demand - Assessee mis led Tribunal to obtain stay application - Held that:- A perusal of the principle of law would clearly bring out that the party mis–representing facts before the Court with the object of securing interim relief would be rendered disentitled to opportunity of hearing the matter on merit. Once the Tribunal has found that the interim order was secured by the appellant by practicing misrepresentation then no option is left with the Tribunal to non–suit the appellant on principle and precedent. It is established beyond doubt that such fraudulent misrepresentation has no place in the judicial administration. There is no substantial question of law within the meaning of Section 35 G of the Act, which may warrant admission of the appeal - Following decision of KD. SHARMA Versus STEEL AUTHORITY OF INDIA LTD. & ORS. [2008 (7) TMI 851 - SUPREME COURT OF INDIA] - Decided against assessee. Issues:1. Appeal challenging final order under Central Excise Act, 1994.2. Misleading the Tribunal regarding deposit of duty demand.3. Fraudulent misrepresentation for securing interim relief.4. Application of legal principles on fraud in judicial proceedings.Issue 1: Appeal challenging final order under Central Excise Act, 1994The appellant filed an appeal under Section 35-G of the Central Excise Act, 1994, against the final order passed by the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal observed that the appellant falsely claimed to have already recovered the demanded amount of Rs. 3,06,65,035. An application was made to waive the pre-deposit condition of interest and penalty, which was granted by the Tribunal. However, it was later revealed that the appellant had not deposited the entire duty demand as claimed, leading to the dismissal of the appeal by the Tribunal.Issue 2: Misleading the Tribunal regarding deposit of duty demandThe Tribunal found that the appellant had misled them by falsely asserting that the duty demand confirmed against them had been deposited. The appellant's misleading statements led to the recall of the stay order and the dismissal of the stay application. The Tribunal emphasized the importance of depositing the duty demand as a pre-condition for hearing an appeal unless waived by the Tribunal, which the appellant did not apply for, resulting in the dismissal of their appeal.Issue 3: Fraudulent misrepresentation for securing interim reliefThe Court noted that the appellant's deliberate attempt to mislead the Tribunal for obtaining interim relief through fraudulent means was unacceptable. The appellant's argument of a typographical error was rejected as the appellant had categorically claimed in the appeal memorandum that the duty demand had been paid, indicating intentional misrepresentation. The Court cited legal precedents stating that fraud vitiates all acts, emphasizing that any fraudulent judgment obtained through deception is considered null and void in the eyes of the law.Issue 4: Application of legal principles on fraud in judicial proceedingsThe Court reiterated that fraud in judicial proceedings, as defined by legal precedents, renders any judgment or order obtained through such means as null and void. The Court emphasized that misrepresenting facts to secure interim relief disentitles a party from a fair hearing on the merits of the case. The Court concluded that fraudulent misrepresentation has no place in judicial administration and dismissed the appeal, stating that there was no substantial question of law warranting its admission under Section 35-G of the Act.In conclusion, the judgment highlighted the serious consequences of misleading the Tribunal and engaging in fraudulent misrepresentation in judicial proceedings, emphasizing the importance of upholding integrity and honesty in legal matters.