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2006 DIGILAW 365 (RAJ)

Global Syntax (BHL) Ltd. v. Union of India

2006-02-03

N.N.MATHUR, R.P.VYAS

body2006
Judgment 1. These three appeals under Section 35-G of the Central Excise Act, 1944, hereinafter referred to as “the Act of 1944”, are directed against the common order dated 13.05.2005 passed by the Customs, Excise & Service Tax Appellate Tribunal, hereinafter referred to as “the Tribunal”, dismissing the appeal for non-compliance of the directions dated 07.02.2005 of pre-deposit. 2. The appellant M/s. Global Syntex (BHL) Ltd. is a Public Limited Company incorporated under the Companies Act, 1956. This appeal has been filed through its Executive Director Shri Balwant Singh Ranka. Another appeal being D.B. Central Excise Appeal No. 5/2006 has been filed by Shri Balwant Singh Ranka himself in his capacity as Executive Director of the Company. Third appeal being D.B. Central Excise Appeal No. 3/2006 has been filed by Shri Daulat Singh Ranka, the Managing Director of the Company. 3. It appears that the appellant Company is engaged in the manufacturing of Processed Man Made Fabric (PMMF) on which excise is payable under the Act of 1944 under Chapters 51, 52, 54 and 55 of the Central Excise Tariff Act, 1985. The Anti Evasion Wing of Central Excise Commissioner, Jaipur raided the factory of the appellant Company on 10.01.2002 and it was found that the Company had cleared man made fabrics without payment of duty during the period 01.08.2001 to 07.01.2002. The Commissioner of Central Excise, Jaipur-II raised a demand in the sum of Rs. 2,23,64,285/-mainly based on entries in two notebooks in the month of November, 2001 and January, 2002 and two cash books showing cash entries and the statement of the Executive Director and the Warehouse incharge and others. It was found that it was a case of clandestine manufacture and removal of the processed man made fabrics. The Commissioner also levied equal amount of penalty upon the Company and penalties of Rs. 20 lacs each on its Executive Director and Managing Director and Rs. 1 lac on Accounts Assistant, General Manager Finance, Warehouse Incharge and Cashier. Separate appeals were preferred before the Tribunal. An application was filed in the appeal filed on behalf of the Company for waiver of pre-deposit of the amount of duty and the penalty. The Tribunal prima facie found that the Department has been able to bring home the charge of clandestine manufacture and removal of the processed man made fabrics. Separate appeals were preferred before the Tribunal. An application was filed in the appeal filed on behalf of the Company for waiver of pre-deposit of the amount of duty and the penalty. The Tribunal prima facie found that the Department has been able to bring home the charge of clandestine manufacture and removal of the processed man made fabrics. However, the Tribunal also noted that the ledger relied upon by the Department covered an amount of Rs. 1.23 crores approximately and not the entire amount. The Tribunal also, taking into consideration the plea of financial hardship as a Unit has been closed from the year 2002 and registered with the BIFR and the position even at the time of closure, directed pre-deposit of Rs. 25 lacs by M/s. Global Syntex (BHL) Ltd. within a period of 8 weeks. The Tribunal made the order pre-emptory to the effect that the non-compliance will result in vacation of the stay and dismissal of appeals without prior notice. It is significant to notice that the order was passed on 07.02.2005 in all the Appeals No. E/61-67/05. All the appeals were dismissed by the impugned order dated 13.05.2005 as a consequence of non-compliance of the order dated 07.02.2005. 4. It is contended by Mr. Vikas Balia, learned Counsel, that the Tribunal has committed a grave error in dismissing appeals simply on the ground of non-deposition of amount without entering into the merits of each case. The deposit of amount of duty or penalty cannot be construed as a condition precedent for the maintainability of appeal. It is further submitted that at the most, the adjudicating authority can adjourn the appeal sine die till the deposit of the said amount of duty or penalty but the non-deposit can, in no case, warrant dismissal of the appeal. Learned Counsel has heavily placed reliance on a decision of the learned Single Judge in Kerala High Court in Excel Rubber Products vs. Addl. Collector of C. Ex. & Customs, reported in 1989 (44) ELT 629 (Ker), wherein it is held that non-compliance with the requirement of pre-deposit envisaged in Section 35-F of the Act of 1944 will not affect the maintainability of the appeal. 5. Collector of C. Ex. & Customs, reported in 1989 (44) ELT 629 (Ker), wherein it is held that non-compliance with the requirement of pre-deposit envisaged in Section 35-F of the Act of 1944 will not affect the maintainability of the appeal. 5. In order to appreciate the contention of the learned Counsel, it will be convenient to read Section 35-F of the Act of 1944, which reads as follows:-“35-F. Deposit, pending appeal, of duty demanded or penalty levied.-where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order, shall pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied:-Provided that where in any particular case the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner Appeals or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of the revenue. Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the day of its filing.” 6. On analysis of Section 35-F, it emerges that though the deposit under the said provision is not a condition precedent for filing the appeal, but pre-deposit however a condition precedent for hearing the appeal on merits. The provision clearly provides that the appellant shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. The ingenious argument of the learned Counsel is that hearing of the appeal should be adjourned sine die in the event of non-depositing the duty demanded or penalty levied. A Division Bench of the Gujarat High Court rejected similar contention relying on a decision of the Apex Court in Shyam Kishore vs. Municipal Corporation, reported in 1993 (1) SCC p.22 7. It is well settled that right to appeal is not an absolute right. A Division Bench of the Gujarat High Court rejected similar contention relying on a decision of the Apex Court in Shyam Kishore vs. Municipal Corporation, reported in 1993 (1) SCC p.22 7. It is well settled that right to appeal is not an absolute right. It is a statutory right. If the Statute gives a right to appeal upon certain conditions, it is upon fulfillment of those conditions. Hearing of a case pending before the Court or Tribunal, is to be regulated as per the prescribed procedure. It cannot be left with the whim and entire convenience of the party approaching the Court. Thus, it is erroneous to contend that an appeal should be adjourned sine die, unless the appellant chooses to deposit the amount. 8. It is next contended by the learned Counsel that the order of pre-deposit was only in the case of Company and, as such, appeals filed by Shri Balwant Singh Ranka and Daulat Singh Ranka could not have been dismissed. A bare look at the order dated 07.02.2005 shows that it was passed in all the appeals. The peremptory order pertains to all the appeals filed by the Company and its officers. 9. It appears from one of the case from Madhya Pradesh High Court in Prestige Metals P. Ltd. vs. CEGAT , New Delhi, reported in 2002 (141) ELT 335 (M.P.), that in identical circumstances, where the Tribunal had dismissed the appeal as a consequence of the peremptory order, the High Court also refused to interfere with the order, which was further not interfered by the Supreme Court in special leave petition. However, the Supreme Court gave indulgence only to the extent that if within the extended time, the amount of pre-deposit is deposited, the appeals will be restored and decided on merits. We had given such opportunity to the learned Counsel, when the matter was called on 30.01.2006. It is stated by the learned Counsel that the Company is not in a position to deposit the amount. 10. Consequently, there being no substantial question of law involved, all the appeals stand dismissed summarily. If the appellant approaches to the Tribunal and make a submission for depositing the amount in terms of order dated 07.02.2005 and restoration of the appeals, it will be open for the Tribunal to restore the appeals on merits.