Vaibhav Auto Industries vs Union of India

Akil Abdul Hamid Kureshi, J.�The petitioner has challenged the order dated 9-9-2014 as at Annexure - ''N'' to the petition. Under the said order, the Customs, Excise & Service Tax Appellate Tribunal (''the Tribunal'' for short) reduced the condition of pre-deposit from Rs. 1 crore to Rs. 60 lacs for hearing of appeal of the petitioner on merits. Learned counsel Shri Dave for the petitioner submitted that the petitioner has very arguable points in the appeal before the Tribunal. The petitioner-unit also suffers from acute financial hardship. Considering such factors, the Tribunal ought to have fully waived pre-deposit requirement. However, in the facts of the present case, we are not inclined to entertain such contentions. Our reasons are as follows: Earlier, the petitioner, before the Tribunal had preferred application for pre-deposit waiver. On such application, the Tribunal had passed an order dated 11-7-2013 directing the petitioner to deposit 50% of the duty confirmed by the adjudicating authority, within twelve weeks from the date of the order. This amount came to nearly Rs. 1.65 crores. The petitioner thereupon applied for modification of such order on the ground that the petitioner''s representative could not remain present when the earlier order was passed, due to which, relevant documents could not be pointed out to the Tribunal nor proper submissions could be made. The Tribunal disposed of such application by an order dated 24-10-2013 recording that the petitioner had sought adjournment thrice. Such requests were granted. Despite which, there was no representation on the part of the petitioner. The Tribunal, therefore, while not modifying the condition, granted extension for complying with such conditions, as prayed for, by the petitioner.

The petitioner thereupon filed Special Civil Application No. 590 of 2014 and prayed for indulgence. While recognizing that the Tribunal was justified in proceeding ex parte, looking to the sizeable amount required to be deposited by the petitioner by way of pre-deposit, this Court, on 6-3-2014 Vaibhav Auto Industries Vs. Union of India, in the said petition, passed following order:

"3. We have not the slightest doubt that having filed the proceeding before the tribunal, the petitioner ought to have pursue the same with all seriousness. Repeated adjournments were neither justified nor can be found any fault with the tribunal in not adjourning the proceedings time and again. Nevertheless, in facts of the case when it is pointed out to us that at least on the last occasion the reason pressed was sickness of representative of the petitioner and when by an ex parte order, pre-deposit of sizeable amount of Rs. 1.65 crore came to be imposed, in our opinion, the petitioners deserve one last opportunity to argue the petition for waiver of pre-deposit on merits before the tribunal. This however, cannot be done unconditionally. The petitioner must pay reasonable heavy cost for availing such an opportunity.

In facts of the case, therefore, orders dated 11-7-2013 and 24-10-2013 passed by the tribunal are set aside. The proceedings are placed back before the tribunal for consideration on merits and disposal in accordance with law. For such purpose, tentatively we fix the date of 21-4-2014 before the tribunal. This is only in order to ensure that no fresh notice shall have to be served to the parties of such proceedings. It is made abundantly clear that if on such date the tribunal wishes to reschedule the hearing, it would be absolutely open for the tribunal to do so.

The petitioner shall deposit a sum of Rs. 50,000/- with the Gujarat State Legal Services Authority by 31-3-2014."

The petitioner thereupon was required to appear before the Tribunal on 21-4-2014. Nobody remained present on behalf of the petitioner. The consultant of the petitioner sent a letter dated 19-4-2014 showing his inability to remain present but raised grounds in support of the application for waiver of pre-deposit. The Tribunal therefore closed the stage of hearing. The Tribunal passed order on 1-5-2014. After recording reasons and noting, non-appearance by or on behalf of the petitioner, the Tribunal reduced the requirement of pre-deposit to Rs. 1 crore. In such order, the Tribunal noted that even before the adjudicating authority, there was no further participation by the petitioner. Considering such aspects, the Tribunal passed following order:

"8. As we have already held that the issue on merit needs deeper consideration and the issue being highly arguable, we find that the appellant should be put to some condition for hearing and disposing the appeal on merit. In the interest of justice and in the facts & circumstances of the case, we direct the appellant herein to deposit an amount of Rs. 1 crore (Rs. one crore only) within a period of twelve weeks from today and report compliance on 4-8-2014 before Deputy Registrar. Deputy Registrar, on ascertaining such compliance, will place the file before the Bench on 11-8-2014 for passing an appropriate order. Subject to such compliance being reported, the application for waiver of pre-deposit of balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal."

The petitioner once again filed an application for modification of the said order on the premise that in absence of participation from the consultant of the petitioner, all aspects could not be brought to the notice of the Tribunal. The Tribunal, on such application, passed its order dated 9-9-2014 which is impugned in this petition. After recording the submissions at length and that there was non-cooperation on the part of the petitioner, the Tribunal thereafter proceeded to distinguish the present case of the petitioner from that of M/s. Atithi Gokul Automobile Works, in which, the Tribunal had remanded the proceedings for further consideration to the adjudicating authority. The Tribunal, in view of recent amendment in Section 35F of the Central Excise Act, 1944, further reduced the requirement of pre-deposit to Rs. 60 lacs. The Tribunal granted time upto 13-10-2014 for making such deposit. It is this order which is under challenge in this petition.

As seen from the record, the petitioner has not remained present and participated in the proceedings before the Tribunal. Time and again, the Tribunal was compelled to adjourn the proceeding at the request of the petitioner. Finally, when there was no participation, the Tribunal decided such application ex parte. Even after remand from this Court, the petitioner did not appear before the Tribunal. The petitioner again approached the Tribunal on the ground that there was no oral submissions made on behalf of the petitioner. The Tribunal while not accepting such ground, still further reduced requirement of pre-deposit of Rs. 60 lacs. In view of conduct of the petitioner, no further indulgence would be permissible. We do not see any reason why we should interfere with the order of the Tribunal in exercise of its discretionary jurisdiction in facts of this case.

In the result, this petition is dismissed. However, in order to enable the petitioner to fulfill the condition of pre-deposit, we extend the time upto 31-12-2014. If the petitioner fulfils such condition, the Tribunal shall hear the appeal on merit.