High Court overturns Tribunal's decisions, emphasizes substantive justice over procedure.

The High Court allowed the appeals, setting aside the Tribunal's orders dismissing the appeal, the petition for installment payments, and the application for restoration of the appeal. The Court directed the Tribunal to hear the appeal afresh on merits, emphasizing that procedural requirements should not override substantive justice. The Tribunal was instructed to expedite the disposal of the appeal, ensuring both parties had a fair opportunity to present their case.

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Issues Involved:
1. Dismissal of the appeal by the CESTAT for non-compliance with the pre-deposit requirement.
2. Dismissal of the petition to allow payment of the balance pre-deposit in installments.
3. Dismissal of the application for restoration of the appeal after the pre-deposit was eventually made.

Issue-wise Detailed Analysis:

1. Dismissal of the Appeal for Non-Compliance with Pre-Deposit Requirement:
The Tribunal dismissed the appeal filed by the Assessee due to non-compliance with the pre-deposit requirement under Section 129E of the Customs Act, 1962. The appellant had paid only Rs. 25,00,000/- out of the required Rs. 65,00,000/-. A subsequent payment of Rs. 3,00,000/- was made after obtaining a bank loan, but the balance was not paid in time. The Tribunal dismissed the appeal citing lack of provision for installment payments. The High Court considered whether the Tribunal was correct in dismissing the appeal and noted that the provisions for mandatory pre-deposit were introduced in the Finance Act (No.2), 2014, effective from August 6, 2014, which eliminated the discretion previously available to the Tribunal to reduce or waive the pre-deposit.

2. Dismissal of the Petition for Installment Payments:
The appellant filed a petition seeking permission to deposit the balance amount of Rs. 37,00,000/- in installments, which was dismissed by the Tribunal. The High Court examined whether the Tribunal was correct in its decision, noting that the Tribunal had become functus officio after passing the final order. The High Court discussed the meaning of 'functus officio' and concluded that the Tribunal did not become functus officio merely by passing an order dismissing the appeal for procedural non-compliance.

3. Dismissal of the Application for Restoration of Appeal:
After eventually paying the balance pre-deposit amount, the appellant sought restoration of the appeal, which was dismissed by the Tribunal. The High Court analyzed whether the Tribunal had jurisdiction to restore the appeal once the procedural requirement was met. It was argued that the right to appeal is a substantive right while the pre-deposit requirement is procedural. The High Court cited various judgments indicating that the Tribunal has the power to recall its order to meet the ends of justice and that procedural non-compliance should not extinguish the substantive right of appeal.

Conclusion:
The High Court set aside the orders of the Tribunal dismissing the appeal, the petition for installment payments, and the application for restoration of the appeal. The High Court directed the Tribunal to hear the appeal afresh on merits, emphasizing that procedural requirements should not override substantive justice. The Tribunal was instructed to dispose of the appeal expeditiously, ensuring both sides had the opportunity to present their case.

Judgment:
1. C.M.A.No.158 of 2016: Allowed. The Tribunal's Final Order No.40471/2013 dated 22.10.2013 was set aside.
2. C.M.A.No.159 of 2016: Allowed. The Tribunal's Miscellaneous Order No.41071/2014 dated 24.06.2014 was set aside. The application for permission to deposit was dismissed as infructuous since the balance amount was subsequently paid.
3. C.M.A.No.97 of 2016: Allowed. The Tribunal's Miscellaneous Order No.41282/2015 dated 14.10.2015 was set aside. The application to restore the appeal was allowed, and the Tribunal was directed to hear the appeal afresh on merits.

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