Stuti Electronics Ltd. vs Union of India (UOI)

This writ petition is directed against order dated 26 September 2001, passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi whereby petitioners'' appeals No. C/469-479/2000-NB have been dismissed for failure on the part of the petitioners to comply with order of pre-deposit dated 20 April 2001.

Briefly stated, the material facts giving rise to the writ petition are as follows:

The first petitioner company, a 100% export oriented unit, is engaged in the manufacture of colour computer monitors. It availed of the benefit of duty free import of capital goods, raw material, spares etc. under Notification No. 53/97-Cus., dated 3 June 1997 (as amended). On 17/18 May 1999, the Central Excise officers visited the factory premises of the company and found that a large number of capital goods, spares etc., imported duty free, were not available in the factory premises. According to the respondents, Mr. Anil Saxena, Managing Director of the petitioner company, petitioner No. 2, during the course of his statement, recorded on 20 May 1999 and 21 may 1999, admitted the shortage and undertook to deposit the customs duty leviable for breach of conditions imposed in the afore-noted notification at the earliest. Physical verification report, recording the missing items, was also signed by the said Mr. Saxena. On a consideration of the reply filed by the petitioners to the show cause notice issued to them, the adjudicating authority confirmed the demand of customs duty of Rs. 62,08,704/- u/s 28(2) of the Customs Act, 1962 (in short the Act). A penalty in the same amount as also interest u/s 28AA of the Act was also levied on the petitioner company. In addition thereto, a penalty of Rs. 10 lakhs was also imposed on petitioner No. 2 u/s 112 of the Act.

Being aggrieved, the petitioners preferred appeals to the Tribunal with an application for stay of the demand. Vide order dated 20 April 2001, the Tribunal directed the petitioner company to deposit a sum of Rs. 28.5 lakhs and Anil Saxena, Managing Director, a sum of Rs. 2.5 lakhs, as a condition precedent for stay of remaining demand and for hearing of their appeals. As noted above, both the petitioners having failed to comply with the said order, their appeals have been dismissed.

On 21 April 2003, Mr. Anil Saxena had appeared in person to argue the matter. After hearing him for some time, we had asked him to make up his mind if he was prepared to deposit a further sum of Rs. 2.50 lakhs so that his prayer for dispensing with the he deposit of the remaining amount in terms of the Tribunal''s order could be considered. Mr. Saxena states that he is not in a position to deposit any amount. He, however, urges that having regard to their poor financial condition, they should not be asked to deposit any amount in addition to a sum of Rs. 1.5 lakhs already deposited by petitioner company prior to the Tribunal''s order and their appeals may be restored and heard on merits. Nothing has been argued on the merits of the allegations against the petitioners.

On a consideration of the material on record and keeping in view the afore-noted stand of the petitioners, we do not consider it to be a fit case for interference with the impugned order passed by the Tribunal. It is true that right to appeal is a substantive right granted by the Legislature but the right is not absolute. While granting such a right, the Legislature is competent to subject the right to certain pre-conditions. Section 129E of the Act stipulates that no appeal under Chapter XV is competent unless the duty or penalty and interest in dispute is deposited. The condition is mandatory. However, discretion is conferred on the appellate authority to dispense with such deposit if it is of the opinion that deposit would cause undue hardship to the person concerned. While exercising the discretion the appellate authority may impose such conditions as it may deem fit so as to safeguard the interests of the Revenue. Principles to be kept in view while considering the application for stay are well known. However, since, in the instant case, except for financial difficulty, no other point is urged before us, we deem it unnecessary to restate these principles. In our view, the requirement of deposit of the amount in dispute being a condition precedent for entertaining the appeal, on the basis of a bald assertions that the petitioners are not in a position to deposit any amount, the plea that an unconditional stay should be granted to them cannot be accepted.

No ground for interference with the impugned order is made out. Consequently, the writ petition fails and is accordingly dismissed.