RATHI ISPAT LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule D.B. Order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (in short the CEGAT), dated 22nd June, 2000 is subject-matter of challenge. By said order deposit of entire disputed demand was directed as condition precedent for restoration of appeal already dismissed for non-deposit. According to petitioner such direction has no legal sanction.

(2.) A few relevant aspects need to be noted before the main grievance can be looked into. By order dated 25th November, 1997 Commissioner of Central Excise, Meerut (hereinafter referred to as 'Commissioner') confirmed the demand of central excise duty of Rs. 4,25,54,960.00 for the period from March, 1994 to November, 1995; Rs. 1,83,94,1687..00- for the period from August, 1993 to February, 1994; Rs. 88,12,974.00for the period from March, 1994 to July, 1994, disallowed the Modvat credit of 1,00,40,124.00 and imposed penalty of Rs. 79,83,000.00 in addition to personal penalty of Rs, 50 lakhs each on the three Directors, personal penalty of Rs. 5.00 lakhs on the Manager in terms of Rule 1730(2) of the Central Excise Rules, 1944 (in short the 'Rules'). Stand that initiation of proceeding was beyond time prescribed under Section 11 -A of the Central Excise Act, 1944 (in short the 'Act') was not accepted. Appeal was filed before the CEGAT under Section 35B of the Act and prayer was made for dispensing with the requirement to deposit the disputed amount. Special Bench 'A' of CEGAT by its order dated 1st May, 1998 disposed of the said application directing payment of Rs. 1.00 crore against the duty demand of about Rs. 8.00 crores on or before 3rd August, 1998. Civil Writ Petition No. 3295/98 was filed before this Court praying for setting aside the order of CEGAT directing payment of Rs. 1.00 crore. By order dated 20th July, 1998 the writ petition was dismissed holding that all relevant aspects were kept in view by the CEGAT. At request of learned Counsel for the petitioner, who sought for extension of time to comply with order of the CEGAT, time was granted till 31st August, 1998. The said order was assailed before the Apex Court. Though initially proceedings before the CEGAT were directed to remain suspended till further orders, finally the Special Leave Petition was dismissed by order dated 20th November, 1998. The deposit of Rs. 1.00 crore which was directed by the CEGAT was not made within the time stipulated. However, same was done subsequently in instalments. As the direction for making deposit of Rs. 1.00 crore was not complied with, the appeal filed by the petitioner was dismissed by CEGAT. An application for restoration of the appeal was filed stating that the deposit of the entire amount had been subsequently made in instalments and by 31st March, 2000 the amount directed to be deposited had in fact been deposited. Prayer was made before the CEGAT to recall the appeal. Prayer was made to accept undertaking given that the entire plant and machinery which was under the custody of the Department will not be alienated during the pendency of the appeal. It was further submitted that applicant was also prepared to pay interest on the delayed deposit of the amount directed to be deposited, i.e., Rs. 1.00 crore. The plea did not find favour with the CEGAT because of various factual aspects which we have noted above. By the impugned order it directed that if the entire amount adjudicated by the Adjudicating Authority is deposited by 11th August, 2000 and compliance is reported by 18th August, 2000, the application for restoration of appeal shall be considered.

(3.) Learned Counsel for the petitioner submitted that immediately after the dismissal of the SLP by the Apex Court, and in fact on the very same day, an application was filed before the CEGAT seeking extension of time. That was not considered. The appeal was dismissed and, therefore, the petitioner was denied of opportunity to get its appeal heard on merits. Several factual details to show financial constraints have been brought on record. It is submitted that CEGAT had not discussed these relevant aspects which clearly establish financial hardship. With reference to conclusions arrived at by the departmental Authorities, it is submitted that demands as raised have no legal footing and there is hardly any chance of its sustainability by CEGAT. Learned Counsel for the respondent submitted that the plea now taken about financial hardship and merits of the case had in fact been considered by this Court and the Apex Court earlier. Considering them, no interference was done. It is not open to the petitioner to re-open the entire gamut again. Merely filing an application before the CEGAT seeking extension of time was really of no consequence as it appears that such a prayer was not made even before the Apex Court. On the other hand on the request of petitioner time was extended by this Court in the earlier writ application. There was no option left with the CEGAT but to dismiss the appeal for non-compliance with the direction for deposit of Rs. 1.00 crore. However, taking a liberal view the CEGAT has directed restoration of the appeal in question on deposit of the entire amount. According to him, CEGAT need not have adopted such a course because on account of non- deposit the appeal itself was rendered incompetent and the CEGAT on the first occasion was justified in dismissing the appeal as not maintainable.