Parth Harsh Mills Pvt. Ltd. vs Union of India (UOI)

D.A. Mehta, J.—The petitioner, a Private Limited Company has challenged order dated 27th September, 2004 (Annexure-E) as well as order dated 3rd February, 2005 (Annexure-J) made by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (The Tribunal).

It is the case of the petitioner that by Order-in-Original dated 30th April, 2001/8th May, 2001 (Annexure-A), it was called upon to make payment of sum of Rs. 13,00,927/- and penalty of Rs. 5,000/-. The petitioner challenged the same before Commissioner (Appeals) who vide order dated 5th October, 2004 (Annexure-D) dismissed the appeal since the petitioner had failed to deposit amount of Rs. 5,00,000/- which was directed to be deposited vide order dated 19th May, 2003. The petitioner carried the matter in appeal before the Tribunal and the Tribunal, disposed of the stay application as well as the appeal vide impugned order dated 27th November, 2004 directing the petitioner to deposit sum of Rs. 5,00,000/- within a period of eight weeks, and upon such deposit being made the balance amount of pre-deposit of duty and penalty stood waived. As the Commissioner (Appeals) had dismissed the appeal for non-compliance of order made under provisions of Section 35F of the Central Excise Act, 1944 (the Act), the Tribunal in the situation, set aside the order of Commissioner (Appeals) and directed Commissioner (Appeals) to decide the appeal afresh after affording an opportunity of hearing to the appellant, subject to the condition that the appellant shall comply with the directions of the Tribunal regarding making of deposit.

Admittedly, the said order was not complied with by the petitioner, because according to the petitioner, in the meantime order dated 2nd November, 2004 made by the Tribunal in separate set of proceedings in the petitioner''s own case came to be made finally deciding the controversy between the parties on merits in favour of the petitioner. The petitioner therefore moved Misc. Application which was titled as Misc. Application (FOR RESTORATION OF APPEAL AND MODIFICATION OF ORDER) on 8th April, 2004. The said Misc. Application came to be rejected by order pronounced in open Court on 20th January, 2005.

Mr. P.M. Dave, learned Advocate appearing on behalf of the petitioner submitted that: (i) as the Tribunal has not passed any order on merits on 27th September, 2004, the said order could have been revised/varied/recalled, because according to the petitioner, in light of the subsequent decision rendered by another Bench of the Tribunal on merits of the controversy, the requirement to deposit the stipulated sum as condition for hearing the appeal on merits was academic (ii) in the alternative, in light of the subsequent decision of the Tribunal on merits all adverse orders with special reference to Order-in-Original dated 30th April, 2001/8th May, 2001 (Annexure-A) was required to be set aside and the respondent was prevented from enforcing recovery of any demand in pursuance of the said order. In support of the aforesaid proposition Mr. Dave highlighted the provisions of Section 35F of the Act to submit that the Tribunal could not have imposed any condition for making a pre-deposit before the Appeal should be heard by the Commissioner (Appeals) on merits and in these circumstances also, the impugned order dated 27th September, 2004 was bad in law.

As can be seen from the facts on record, which are undisputed, the Commissioner (Appeals) in the first instance had not rendered any decision on merits and had dismissed the appeal for non-compliance of the condition imposed while granting stay regarding balance of duty and penalty demanded in pursuance of the Order-in-Original. In these circumstances, there was no occasion for the Tribunal to decide the appeal on merits and all that the Tribunal did was, by virtue of exercise of its discretion u/s 35F of the Act extended the time for complying with the condition imposed by Commissioner (Appeals), and simultaneously the Tribunal directed Commissioner (Appeals) to hear and dispose of the appeal on merits on the petitioner''s complying with the condition imposed for depositing a sum of Rs. 5,00,000/-. It is an incorrect reading of the impugned order of the Tribunal by the petitioner when it is submitted that the Tribunal could not have imposed any such condition. The Tribunal had not imposed any condition, it had merely extended the period for making pre-deposit and complying with the direction of Commissioner (Appeals). In these circumstances, it is apparent that the Tribunal could not have gone into the merits of the matter and in fact has not gone into the merits of the matter.

There being no infirmity in exercise of discretion by the Tribunal, it is not open to this Court in exercise of extraordinary jurisdiction to enter into appreciation of the controversy on merits of the matter. The Court is only required to ascertain as to whether the decision making process of the Tribunal is in accordance with law. In these circumstances, there is no question of the Court quashing and setting aside the Order-in-Original (Annexure-A), especially in light of the fact that the petitioner has already availed of the alternative remedy available to the petitioner under the statute in absence of any material on record, to suggest that the impugned order of the Tribunal made by exercise of discretion u/s 35F of the Act, is in any manner incorrect.

As can be seen from the Tribunal''s subsequent order dated 25th January, 2005/3rd February, 2005, the Tribunal is aware of the fact that it could not go into the merits of the case, it having not entered into any such exercise in first round while deciding the stay application and the appeal. The Tribunal having already disposed of the appeal by remanding the matter to the file of the Commissioner (Appeals), the proceedings of stay application and the appeal had come to an end before the Tribunal and if the Tribunal in its discretion did not find it necessary to intervene on the Misc. Application made by the petitioner, there is no reason for this Court to take a different view of the matter in the circumstances.

In the result, the petition is rejected.