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2002 DIGILAW 567 (MP)

Rishabh Chemicals Pvt. Ltd. v. Union of India

2002-06-24

A.M.SAPRE

body2002
Judgment ( 1. ) WITH the consent of parties, the matter is heard finally on merits. ( 2. ) BY filing this petition, the petitioner has questioned the legality and validity of the order dated 26-3-2001 (Annexure P-1) passed by CEGAT in an appeal filed by the petitioner. In view of the limited issue involved in the writ, it is not necessary to take note of detail facts of this case except to mention those which alone are material to decide the issue involved in the writ. ( 3. ) PETITIONER claims to be engaged in the business of a commodity as Grey Filter Cloth under the Excise Act. It is classified under Chapter 59 and is chargeable to duty at the rate of 15% advalorem. ( 4. ) ON 10-2-1998, a vehicle belonging to petitioner carrying certain goods was seized by the sleuths of Central Excise Department. In the search, it was found that the goods which were being transported were found as filter fabric, liable to duty under Chapter 59 (sub-heading 5911. 40), since no duty was paid nor any document was shown, indicating payment of duty, the concerned authority issued show-cause notice to petitioner calling upon them to show cause as to why the duty be not levied on the goods in question and why penalty be not imposed. The petitioner contested the issue and inter alia contended that the goods in question was falling in Chapter 52 and thus not liable to any duty. This contention was rejected by the authority by his order dated 21-11-1999 and while holding the goods to be classified as dutiable under Chapter 59, raised a demand for Rs. 28,77,654/- towards, duty and a penalty of Rs. 28,77,654/ -. The petitioner filed an appeal to CEGAT against the said order. In appeal, the petitioner made two stay applications, seeking stay of impugned demands and prayed for an order for dispensing with the condition of pre-deposit of the amount under challenge. It is on these applications, the CEGAT passed the impugned order by which the CEGAT partly allowed the applications by dispensing with the pre-deposit of entire penalty amount. In other words, the CEGAT has stayed the recovery of entire penalty amount but has directed the petitioner to deposit the duty demanded to enable the CEGAT to hear the appeal on merits. In other words, the CEGAT has stayed the recovery of entire penalty amount but has directed the petitioner to deposit the duty demanded to enable the CEGAT to hear the appeal on merits. It is further observed that failure to deposit the duty amount will result in dismissal of appeal. It is against this direction, the petitioner has felt aggrieved and filed this petition. ( 5. ) HEARD Shri B. M. Masani, learned Counsel for the petitioners and Shri E. G. Neema, learned Counsel for the respondents. ( 6. ) THE submission of learned Counsel for the petitioners was essentially two fold. In the first place, he contended that in the facts of this case, the CEGAT should have granted absolute stay of the impugned demand rather than the 50%, i. e. , partial one. In other words, the submission was that petitioner has on facts made out a case of absolute stay and hence full stay should have been granted thereby dispensing with the condition of pre-deposit of the impugned dues. Learned Counsel contended that neither the goods in question could be subjected to payment of duty nor a case of penalty is made out. In the second place, his submission was that in any event, non-compliance of the order impugned can not result in dismissal of appeal itself. Learned Counsel urged that petitioner can not be penalized with the dismissal of their appeal only because they failed to comply with the stay order. It was contended that even if petitioner does not comply the direction issued on their stay application, the only consequence that suffers is dismissal of stay application but no dismissal of appeal itself. Learned Counsel also contended that at any rate the observations, of the Tribunal (CEGAT) in concluding para in regard to dismissal of appeal itself in the event of non-compliance of impugned order is bad in law. Learned Counsel placed reliance on a decision reported in 1983 (43) ELT 605 (Ashok Rubber v. Collector of C. Ex. ). ( 7. ) IN reply learned Counsel for revenue contended that no case for interference in the impugned order is called for in this writ. Learned Counsel contended that the order impugned being interim in nature, having been passed in pending appeal on stay matter and that too by granting partial relief to the petitioner, no case for interference is made out. ) IN reply learned Counsel for revenue contended that no case for interference in the impugned order is called for in this writ. Learned Counsel contended that the order impugned being interim in nature, having been passed in pending appeal on stay matter and that too by granting partial relief to the petitioner, no case for interference is made out. Learned Counsel contended that the order impugned is reasoned one. It has taken into account entire facts, legal submissions and then the discretion has been exercised partly in favour of petitioner. This in his submission is enough to sustain the order complained of. Learned Counsel placing reliance on three decisions of Supreme Court reported in (1999) SCC 231, (1981) ELT 679 (SC) and 1989 (39) ELT 178 (SC) contended that the question whether non deposit of amount directed by Tribunal will result in dismissal of appeal remains no longer res-integra and decided in favour of respondent (Revenue) and against the petitioner by the Apex Court in aforementioned three decisions. ( 8. ) HAVING heard the learned Counsel for the parties and having perused the record of the case, I find no merit in any of the main submissions urged by the learned Counsel for the petitioner. ( 9. ) COMING to the question as to whether Tribunal is justified in observing that failure to comply the direction to deposit the money will lead to dismissal of appeal. In my view, need not detain this Court any more. This issue came up for consideration before their Lordships of Supreme Court in atleast three decisions referred supra. In all the three cases, their Lordships held that though the section does not expressly provide for rejection of appeal for non deposit of duty/penalty, yet it makes it obligatory on the appellant to deposit the duty/penalty determined by the Tribunal while deciding stay pending appeal failing which the Tribunal is fully competent to reject the appeal. This issue is therefore settled by the Apex Court and hence this Court can not embark upon any inquiry on this issue. Reliance placed by the learned Counsel for the petitioner on a decision reported in 1989 (43) ELT 605 (Kerala) stands overruled by the decisions of Supreme Court, which had taken view contrary to one taken by the Supreme Court. Reliance placed by the learned Counsel for the petitioner on a decision reported in 1989 (43) ELT 605 (Kerala) stands overruled by the decisions of Supreme Court, which had taken view contrary to one taken by the Supreme Court. Indeed when the issue is decided by the Supreme Court then a decision of any High Court taking a contrary view to that of the view of Supreme Court stands automatically overruled and no longer remains a decision to be relied upon as an authority for the proposition. It is for this reason, the decision of Kerala High Court relied on by the learned Counsel for the petitioner is of no assistance to the petitioner. In view of this discussion, the observations made by the Tribunal are found to be legal, proper and hence upheld being in conformity with the law laid down by the Apex Court. ( 10. ) COMING to the question on merits, I also do not find any case to interfere in the discretion exercised by the Tribunal. It is apart from the fact that the order impugned is in the nature of interlocutory one having been passed on a stay petition. The question whether appellant be granted partial relief in the matter of pre-deposit or full relief is essentially a matter that lies in the exclusive domain of the Tribunal. It is a matter of discretion. If this Court in its writ jurisdiction finds that the Tribunal has applied its mind to the facts of the case and issue involved and then by its reasoned order decide to pass an order partly in favour of appellant then it can not be said to be a case of improper exercise of discretion or a case of failure to exercise the discretion judicially. This Court can not sit as an Appellate Court to again examine the whole issue involved and decide the stay application. It is not the function of the Writ Court in exercise of its powers conferred under Article 227 of Constitution because it does not involve any issue relating to jurisdiction or arbitrary exercise of judicial power. ( 11. ) IN the facts of this case, the Tribunal has given 50% relief to the petitioner. Even the Tribunal, has given cogent reasons for not granting any more indulgence to petitioner in payment of excise dues. ( 11. ) IN the facts of this case, the Tribunal has given 50% relief to the petitioner. Even the Tribunal, has given cogent reasons for not granting any more indulgence to petitioner in payment of excise dues. The conduct of petitioner in not submitting the declaration and other compliance was taken into account while granting partial relief. In my opinion it was one of the factor which should have been taken into account and was rightly taken into consideration while refusing the partial relief. ( 12. ) SINCE, the petitioner did not deposit the money as directed by the Tribunal within the time specified in the impugned order, the appeal filed by the petitioner came to be dismissed. In my opinion, the petitioner is entitled to be granted one indulgence to comply the order of the Tribunal. The extension of time will not cause any prejudice to either and on the other hand the petitioner in the event of they complying the order would get an opportunity of hearing of an appeal on merits. Accordingly, this Court grants 4 months time from the date of this order to the petitioner to deposit/comply the order of the Tribunal impugned in this writ. In case if the petitioner deposit the amount in terms of impugned order, within the time fixed by this Court, the Tribunal will hear and decide the appeal filed by the petitioner on its merits, after granting an adequate opportunity to the petitioner. With these observations, the petition is dismissed.