YUSUF DHANANI Vs. COMMR. OF CUS. (PREVENTIVE)

JUDGEMENT

(1.) THIS application seeking restoration of appeal No. C/415/02 is by the Director of a company, namely M/s. Divya Chemicals Ltd. The stay applications filed by the company and its Director were disposed of by this Bench by a common order dated 2 -11 -02, whereby the company was directed to pre -deposit an amount of Rs. 40 lacs within a month from the date of receipt of that order. It was also made clear in that order by this Bench that, upon deposit of the aforesaid amount by the company, there would be waiver of the penalties imposed on the company and its Director. The company did not deposit the amount, and consequently, their appeal came to be dismissed on 27 -11 -02 for want of compliance with Section 129E of the Customs Act vide Order No. C -I/4098 -99/WZB/2002, dated 4 -12 -2002. In this context, it is pertinent to say that the Director's appeal was dismissed on the same ground as per the said order passed by this Bench. Subsequently, restoration applications were filed by the company and its Director and the same were allowed on terms vide Order dated 31 -10 -07, 2008 (222) E.L.T. 122 (Tri. -Mumbai). This order of the Tribunal was challenged by the department before the Hon'ble High Court and the High Court passed the following order dated 9 -7 -08, 2008 (229) E.L.T. A67 (Bom.):

(2.) BY consent of parties, the order dated 31st October, 2007, impugned in the present appeal is set aside. Application filed by the respondents is remitted back to the Tribunal for decision in accordance with law. All issues are kept open.

(3.) WE have given careful consideration to the submissions. We have found a miscarriage of justice in this case. In our stay order, we directed the company to pre -deposit an amount and also clarified that, in the event of such pre -deposit by the company, there would be waiver and stay in respect of the penalties imposed on the company and its Director. Obviously, the benefit of waiver and stay granted to the Director was contingent upon the conduct of the company. If the company would deposit the amount, its Director would be entitled to waiver and stay in respect of the penalty imposed on him. If the company does not deposit the amount, obviously, no benefit would - accrue to its Director which means that the submissions made by its Director in support of his stay application would arise for independent consideration of the Tribunal and a decision should be taken as to whether he should pre -deposit any part of the amount of penalty imposed on him for purposes of Section 129E. This, however, was not done when the appeals were dismissed by this Bench. The appeal of the Director should not have been dismissed on the ground on which the appeal of the company was dismissed.