Ravi Singhal vs Commissioner of Central Excise

Issue notice. Mr. Satish Kumar, Sr. Standing Counsel accepts notice on behalf of Revenue and submits that the appeals may be disposed of without counter affidavit.

The petitioners felt aggrieved by an order of the Customs, Excise and Service Tax Appellate Tribunal (''Tribunal'', for short) dated 3-4-2012 by which their appeals were dismissed. The substantial question of law sought to be urged is whether the Tribunal fell into error in not considering the appellants'' cases on merits.

The brief facts of the case are that one M/s. K. P. Pouches, a manufacturer of gutkha and paan masala was issued with the show cause notice. The present appellants were also issued with the show cause notice. This culminated in ex parte adjudication order dated 30-11-2009. The said concern K.P. Pouches Pvt. Ltd. and all the present appellants preferred appeals to the Tribunal along with separate applications for suspension of operation of the adjudicatory order, which were disposed of by a common order dated 2-11-2011 by which the Tribunal directed K.P. Pouches to deposit Rs. 5,00,00,000/-. The order of the Tribunal did not separately deal with the grounds made out in support of the present appellants'' circumstances. It merely directed as follows :-

Keeping in view the facts and circumstance of the case, and guidelines issued by the Apex Court in the matter of calling for pre-deposit u/s 35F of the Central Excise Act in Benara Valves Ltd. and Others Vs. Commissioner of Central Excise and Another, , the main applicant, M/s. K.P. Pouches is directed to deposit 5 crores within a period of 12 weeks. On deposit of above amount, balance of dues from all the applicants shall be waived and recovery of same shall be stayed during pendency of the appeal. If such deposit is not made, all the appeals are liable to be rejected without further notice to the applicants.

Apparently K.P. Pouches felt aggrieved by the order dated 8-12-2012 and approached this Court in an appeal, in CEAC No. 9/2012 which was however dismissed. It did not comply with the order; consequently, its appeals were dismissed by the Tribunal. In the above background, the present appeals were taken up for hearing. The Tribunal following its previous order dismissed the appeals for non-compliance and also dismissed their appeals in the following terms :-

Vide common order dated 26th of March 2012, the appeal filed by main party M/s. K.P. Pouches Pvt. Ltd. being appeal No. 2808 of 2010 was dismissed for the failure to make the pre-deposit u/s 35F of the Central Excise Act, in terms of the order of the Tribunal dated 8th of December 2011. The appellants, however, were given extension of one week to deposit the amount of penalty respectively imposed upon them.

Appellants have failed to put in appearance either in person or through their A/R even on the second call. They have not even intimated compliance of the order of the Tribunal for deposit dated 8-12-2011.

Shri Nagesh Pathak, DR states at the bar that order of pre-deposit have not been complied with. Thus, this is a case of willful violation of the mandate of Section 35F which provides for the condition of pre-deposit as a precondition of hearing of appeal. Accordingly, these appeals cannot be heard.

Appeals are accordingly dismissed.

We have heard counsel for the parties. The above narrative shows that the appellants'' contention vis-�-vis the hardship or otherwise and a plea for waiver of pre-deposit was not considered. The Tribunal merely held that in case K.P. Pouches deposited a sum of Rs. 5,00,00,000/- the present appellants need not deposit any amount. The adjudicatory order would disclose that the liability fastened on each one of the appellants was different and in any event far below Rs. 5,00,00,000/-. In the case of Shri Ravi Singhal it is Rs. 1,00,00,000/-, Rs. 1,50,00,000/- for Supreme Road Transport Pvt. Ltd. and Rs. 50,00,000/- for Supreme Trading Co. In these circumstances the Tribunal should not have proceeded to pass a blanket order making the waiver of pre-deposit conditional upon M/s. K.P. Pouches depositing the amount. The Tribunal had to necessarily go into the facts of each appellant''s case and all the relevant questions, such as the existence or otherwise of a prima facie case, the balance of convenience and irreparable hardship, if any, and indicate with clarity the amount they were required to deposit for the whole or part of liability. The omission to do so has led to the present situation, which is not the first of its kind. We notice that this kind of grievance has been voiced earlier also, which the Tribunal would be well-advised to avoid. The stay applications of individual appellants, having regard to their peculiar circumstances, should be considered individually and separate orders should be passed, rather than making an order that has to depend on the outcome of some other appellant''s compliance with the terms of order in his (or its) case.

In view of the above discussion this Court is of the opinion that the impugned order of the Tribunal has to be set-aside. The Tribunal shall grant a hearing to the present appellants as far as their request for waiver of pre-deposit is concerned and after applying its mind to the individual cases pass order in accordance with law. The appeals are allowed in the above terms. The parties are directed to appear before the Registrar, Tribunal on 8-10-2012 for fixing date for hearing of the appeal. Order dasti.