High Court overrules Tribunal, instructs petitioners to pay Rs. 10 lacs, allowing mixed payment mode. The High Court set aside the Tribunal's decision and ruled in favor of the petitioners, directing them to submit a Bank Guarantee for Rs. 5 lacs and pay ...
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High Court overrules Tribunal, instructs petitioners to pay Rs. 10 lacs, allowing mixed payment mode.
The High Court set aside the Tribunal's decision and ruled in favor of the petitioners, directing them to submit a Bank Guarantee for Rs. 5 lacs and pay the remaining Rs. 5 lacs in cash within a month as pre-deposit for their appeals to proceed. The High Court emphasized that although cash deposit is preferred, considering the Tribunal's past acceptance of Bank Guarantees, it allowed this mixed mode of payment. The ruling disposed of the petition accordingly, granting relief to the petitioners.
Issues: Dispute over orders by Customs, Excise and Service Tax Appellate Tribunal on stay application under Section 35F of the Central Excise Act, 1944 leading to dismissal of appeals for non-compliance with stay order conditions.
Analysis: The petitioners offered to deposit Rs. 10 lacs as a condition of pre-deposit during a hearing, leading to a Tribunal order directing them to deposit the amount within 12 weeks. The petitioners requested to submit a Bank Guarantee instead of cash deposit, which the Tribunal allowed partially. Subsequent applications for modification were made by the petitioners, offering Bank Guarantees for the entire amount, but the Tribunal rejected these applications for non-compliance with the cash deposit requirement. The petitioners challenged this decision in the High Court.
The petitioners argued financial hardship due to the closure of their unit since 2001 and requested acceptance of Bank Guarantees for the full amount or more time to deposit cash. The respondent, represented by the Assistant Solicitor General of India, supported the Tribunal's decision.
The High Court noted that the Tribunal had previously allowed the petitioners to submit Bank Guarantees and had already accepted part of the required amount through such guarantees. Considering this, the High Court opined that the Tribunal could have accepted Bank Guarantee for the total amount and granted more time for the cash deposit.
The High Court clarified that cash deposit is generally preferred for pre-deposit, but due to the Tribunal's previous decisions, it allowed the petitioners to make a partial cash deposit along with Bank Guarantees. The High Court set aside the Tribunal's order, directing the petitioners to submit Bank Guarantee for a total of Rs. 5 lacs and pay the remaining Rs. 5 lacs in cash within a month.
Consequently, the High Court ruled in favor of the petitioners, setting aside the Tribunal's order and specifying the pre-deposit amount required for the appeals to proceed. The High Court made the rule absolute in the specified terms, disposing of the petition accordingly.
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