TaxTMI 
TaxTMI 
2009 (6) TMI 222
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....v. Union of India and others (iii) W.P. 2428(W) of 2008, M/s. Shree Krishna Limited and another v. Union of India and others (iv) W.P. 4006(W) of 2008, Suresh Goyel and Sons v. Union of India and others were moved challenging the orders passed in appeals by the Appellate Tribunal directing predeposit under Section 35F or under Section 129E of the Customs Act upon notice to the respondents including the Appellate Tribunal. During the pendency of the writ petitions, appeals were dismissed by the Appellate Tribunal for non-compliance of the orders directing predeposit. However, the writ petitions W.P. No. 230 of 2008, M/s. Shaman Ispat Ltd. and another v. Union of India and others and W.P. No. 1016 of 2008, M/s. Shree Gobinddeo Glass Works Ltd. and another v. Union of India and others were moved after orders were passed by the Appellate Tribunal dismissing the appeals for not complying with the orders directing predeposit. 3. The common grounds of challenge in these petitions are that the applications for dispensing with the predeposit under Section 35F or under 129E or the application for modification of the order directing predeposit in connection with the appeals before the Appe....
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....ed that though additional evidences were furnished, those were not considered by the Appellate Tribunal while passing the order dated 1st February, 2008. Besides, in the writ petitions there are short points which were raised and argued. 4. Since the issues involved are common, the matters were heard analogously. Elaborate arguments were advanced. 5. It is to be noted that I would be proceeding on the basis of Sections 35C (2A) and 35F under the Central Excise Act inasmuch as four of the petitions are under the Central Excise Act and for the purpose of appreciating the judgment wherever the remaining two customs cases are concerned, the said provisions 35C(2A) and 35F should be read as Sections 129B(2A) and 129E of the Customs Act respectively. 6. The issues which fall for consideration are (i) whether the Appellate Tribunal was justified in passing orders dismissing the appeals for non-compliance of its directions directing deposit of an amount by the appellants under Section 35F of the Central Excise Act after the insertion of 35C (2A); (ii) whether an appeal can be dismissed for non-compliance of the order directing predeposit on the day when it is posted for compliance....
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....ions of Section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardships". The discretion must be exercised on relevant materials honestly, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority. In this case it is manifest that the order of the Tribunal was passed honestly, bona fide and having regard to the plea of "under hardship" as canvassed by the appellant. There was no error of jurisdiction or misdirection. 13.It is not the law that adjudication by itself following the rules of natural justice would be violative of any right - constitutional or statutory without any right of appeal as such. If the Statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the rights becomes vested and exercisable to the appellant. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a discretion vested in an obligation to act judicially and properly." 9. The ....
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....e. Relevant provisions in Section 35B relating to appeals to the Appellate Tribunal are as under: "SECTION 35B. Appeals to the Appellate Tribunal. - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order - (a) a decision or order passed by the (Commissioner of Central Excise) as an adjudicating authority; (b) an order passed by the (Commissioner (Appeals) under section 35A; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereafter in this Chapter referred to as the Board) or the Appellate (Commissioner of Central Excise) under section 35, as it stood immediately before the appointed day; (d) an order passed by the Board or the (Commissioner of Central Excise), either before or after the appointed day, under section 35A, as it stood immediately before that day:...... (2)..................... (3) Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the (Commissioner of Central Excise), or, as the case may be, the other party pr....
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....such order: Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated. (3) The Appellate Tribunal shall send a copy of every order passed under this section to the Commissioner of Central Excise and the other party to the appeal. (4) Save as provided in section 35G or section 35L orders passed by the Appellate Tribunal on appeal shall be final." (Emphasis supplied) 14. Section 35F is with regard to the deposit, pending appeal, of duty demanded or penalty levied, is as under:- "SECTION 35F. Deposit, pending appeal, of duty demanded or penalty levied. - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opin....
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.... one hundred and eighty days from the date of such order". Significantly, the first proviso stipulates disposal of appeal and not dismissal. However, second proviso to Section 35C(2A) postulates automatic vacation of the order of stay if such appeal is not disposed of within the said period of one hundred and eighty days. Hence, if an appeal is not disposed of after one hundred and eighty days an order of stay does not survive. There is no question of extension of an order of stay. Thus, in a case where the order of stay passed by the Appellate Tribunal is automatically vacated, there are no fetters on the Revenue, in order to safeguard public revenue, from recovering the sum due. In such a case the Revenue is free to set in motion the process of recovery of the sum due either under Section 11 of the Central Excise Act or under Section 142 of the Customs Act, as the case may be. Now the question is after vacation of the order of stay what would remain in the file? In my view and as correctly submitted on behalf of the petitioner, it is the appeal which remains and in that case the "Appellate Tribunal shall, where it is possible to do so, hear and decide" the appeal "within a period....
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....ithin three years from the date of filing of such appeal. Does the newly introduced sub-section (2A) to Section 35C have any bearing on Section 35F? If sections 35C(2A) and 35F are construed harmoniously the answer has to be in the affirmative. The reasons are not far to see. 17. It has been noted that Section 35C(2A) directs the "Appellate Tribunal" to "hear and decide every appeal" and significantly its first proviso speaks of "an order of stay made in any proceeding relating to an appeal". Now what is the ambit of the words "an order of stay in any proceeding relating to an appeal". Does it include an order passed under 35F? Since the proviso to Section 35F speaks of, in case of "undue hardship", dispensing with the deposit of duty demanded or penalty levied on certain conditions "pending appeal", it is certainly a proceeding relating to an appeal filed under sub-section (1) of Section 35B as contemplated in 35C(2A). Moreover, that an order passed under 35F is a part of the proceedings in appeal is evident from the words at the outset of the said section which relates to "any appeal under this Chapter". Further, though the words "an order of stay" or "stay order" appearing in....
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....he parties the date and place of hearing of the appeal or application. (2) The issue of the notice referred to in sub-rule (1) shall not by itself be deemed to mean that the appeal or application has been admitted. RULE 19. Hearing of appeal. - (1) On the day fixed, or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal. (2) The Tribunal shall then, if necessary, hear the respondent against the appeal and in such a case the appellant shall be entitled to reply. RULE 20. Action on appeal for appellant's default. - Where on the day fixed for the hearing of the appeal or on any other day to which such hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for default or hear and decide it on merits: Provided that where an appeal has been dismissed for default and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the dismissal and restore the appeal. RULE....
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....nsidered necessary or desirable in the circumstances of a given case. 5. Every application for stay shall be accompanied by three copies of the relevant orders of the authorities of the department concerned, including the appellate orders, if any, against which the appeal is filed to the Tribunal by the appellant and other documents, if any: Provided that it shall not be necessary for the applicant to file copies of the documents which have already been filed with the related appeal. (6) Any application which does not conform to the above requirements is liable to be summarily rejected. (7) Subject to any general or special orders of the President in this behalf, an application for stay shall be decided by the Bench having jurisdiction to hear the appeal to which the application relates. RULE 41. Orders and directions in certain cases. - The Tribunal may make such orders to give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. (Emphasis supplied ) 19. As seen, Rule 18 postulates that Appellate Tribunal shall notify the date and place of hearing of ap....
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....ffirmed, that writ petitions were filed challenging its orders directing predeposit. However, in spite of such communication, the Appellate Tribunal took up the matter on the respective dates fixed for reporting compliance regarding deposit and dismissed the appeals as it found that deposits were not made as directed. In this context it is to be noted that it is evident from the fourth paragraph of the order dated 7th July, 2008 passed in the appeal of Indrajit Jash that the Appellate Tribunal was well aware about the pendency of the writ petition before the High Court. 21. Now was it proper for the Appellate Tribunal to dismiss the appeals during the pendency of the writ petitions? In our judicial system there is a hierarchy of Tribunals and Courts. One is free to assail even an interim order passed by an authority or Tribunal or Appellate Tribunal before a superior authority or Court. It is common the authority whose order is under challenge awaits the verdict of the superior authority. However, as seen, the Appellate Tribunal had dismissed the appeals during the pendency of the writ petitions. Thus, the petitioners have been non-suited. In my view, since in all the four appea....
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....e of the fact from the notice demanding justice served on him that the petitioner was about to move a writ petition in this Court, and yet he passed the order dated October 11, 1968, suspending the petitioner, and that also because of the very fact that he was informed of the intending proceeding. This is a conduct which, in my opinion, clearly constitutes a contempt......." 22. The learned Single Judge had made these observations in contempt proceedings arising out of writ petition where the petitioner was placed under suspension with immediate effect until further orders pending drawing up of formal proceedings against him because the petitioner, through his learned lawyer had furnished a notice, received by the State on 9th October, 1968, calling upon the State to rescind the order of transfer dated 27th September, 1968 and had, thereafter, moved the Writ Court on 11th October, 1968. Therefore, the law is one can be held guilty of contempt even if one blocks the free flow of justice not only in a pending proceeding but even in a proceeding which is "imminent" or about to happen. As seen in the instant four appeals, though the Appellate Tribunal was notified in advance about t....
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....22nd May, 2008 there is no discussion regarding the issuance of show cause notice under Section 124 of the Customs Act, on the petitioner in his individual capacity, it amounted to violation of fundamental rights guaranteed under the Constitution of India. Hence, the writ petition is maintainable. Further as the Appellate Tribunal had directed predeposit on the basis of concession which is disputed by the petitioner, in my view, the Appellate Tribunal should consider the matter afresh. W.P. No. 1016 of 2008, M/s. Shree Gobinddeo Glass Works Ltd. v. Union of India and others: 26. In this writ petition the petitioner has challenged the orders dated 21st September, 2005, 12th January, 2006 and 29th November, 2007 on the ground that the orders passed are not speaking orders and the point of undue hardship was not considered. Submission was that the Revenue had no case is evident from the submission of the learned departmental representative as recorded in Paragraph 2 of the order dated 21st September, 2005. Moreover, though it was mentioned in the application for modification of the stay order dated 21st September, 2005 that the company was registered with the BIFR and as it is e....
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.... the matter for compliance on 4th December, 2008. So far as the order dated 4th December, 2008 is concerned it was submitted since the amount of duty and penalty exceeded 10 lakh rupees, the order of the learned single member in dismissing the appeal is in gross contravention of Section 35D read with sub-rule (7) of Rule 28A of the Rules. 29. In my view, since admittedly the demand is Rs. 68,09,260/- and penalty is Rs. 1 crore as evident from the order-in-original dated 31st March, 2005, the learned single member had exceeded his jurisdiction in passing the order dated 4th February, 2008 as it was in violation of Section 35D(3)(a) and (b) of the Central Excise Act and thus, the said order cannot be sustained. So far as the order dated 17th December, 2007 is concerned since I find from Paragraph 3.4 of the said order there has been no deliberation on the financial aspect of the company, the order cannot be sustained. The Appellate Tribunal shall also have to examine whether penalty can exceed duty and whether mere reference to Rule 173Q of the Central Excise Rules, 1944, as has been recorded by the Commissioner of Central Excise, Kolkata-II Commissionerate, Kolkata in its order, ....
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.... the customs officials as evident from the order impugned, yet there was no direction for taking steps against the said officers. 33. Perused the order dated 21st January, 2008 under challenge. Paragraphs 1 to 5 contain the arguments advanced on behalf of the petitioner. Paragraph 6 of the order contains the reasons. I find that the stay application has not been considered at all. Merely stating in the order that order is being passed after hearing the both sides, after perusing the records and the learned members were satisfied and that the main appellants do not have a prima facie case for waiver of predeposit, are not sufficient to justify an order. In my view, there should have been deliberation and formation of opinion which should be evident from the order. Since those are absent, the order impugned cannot be sustained. W. P. No. 4006(W) of 2008, Suresh Goyel and Sons v. Union of India and others: 34. In this writ petition the petitioner has challenged the order dated 1st February, 2008 passed by the Appellate Tribunal principally on the ground that the additional evidence adduced before the Appellate Tribunal was not at all taken into consideration. The stay applica....