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2017 DIGILAW 560 (GUJ)

Gautam Shantilal Shah v. Union of India

2017-03-10

A.S.SUPEHIA, HARSHA DEVANI

body2017
JUDGMENT : Harsha Devani, J. 1. Leave to delete respondent No. 4 from the array of the respondents in each of the petitions. 2. Rule. Mr. Devang Vyas, learned Assistant Solicitor General waives service of notice of rule on behalf of the respondent No. 1 and Mr. Sudhir Mehta, learned senior standing counsel waives service of notice of rule on behalf of respondents No. 2 and 3 in each petition. 3. Having regard to the controversy involved in all these petitions, which lies in a very narrow compass, with the consent of the learned counsel for the respective parties, the matters were taken up for final hearing today. 4. Since all these petitions are directed against the common order dated 6.2.2015 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "the Tribunal") and the facts are also more or less common, the same were taken up for hearing together and are decided by this common judgment. For the sake of convenience, reference is made to the facts, as appearing in Special Civil Application No. 14892 of 2016. 5. The facts stated briefly are that pursuant to a show cause notice dated 7.1.2013 an order in original dated 23.5.2013 came to be made by the adjudicating authority, confirming the show cause notice. Similar orders came to be passed in relation to three separate notices issued to the petitioners. Being aggrieved, the petitioners went in appeal before the Commissioner (Appeals), who vide order dated 3.2.2014, dismissed the appeal and upheld the order-in-original. The order passed by the Commissioner (Appeals) came to be challenged by the petitioners in further appeal before the Tribunal. Similarly, in the other two writ petitions also the matter reached the Tribunal. In all the three appeals, the petitioners moved stay applications before the Tribunal being applications No. E/Stay/13550-13552/2014. By a common order dated 18.12.2014 made on the stay applications, the Tribunal directed the petitioners to make pre-deposit of Rs. 2,00,000/- within a period of six weeks from the date of the order and observed that upon deposit of the said amount, pre-deposit of balance amount of duty along with interest and penalty would be waived till the disposal of the appeals. The petitioners were required to report compliance on 5.2.2015. 6. 2,00,000/- within a period of six weeks from the date of the order and observed that upon deposit of the said amount, pre-deposit of balance amount of duty along with interest and penalty would be waived till the disposal of the appeals. The petitioners were required to report compliance on 5.2.2015. 6. It is the case of the petitioners that since the unit of the petitioners was already sold out and since the petitioners were facing tremendous financial stringencies, the central excise registration of the second petitioner company had been surrendered. However, in order to make pre-deposit of the said amount, the petitioners were required to seek help of consultants and obtained another central excise registration so that pre-deposit could be made. With great difficulty, the petitioners managed to gather the amount of Rs. 2,00,000/-. However, compliance was required to be reported on or before 5.2.2015. Since the website of Central Board of Excise and Customs had some server problem, the petitioners were trying hard to get the company registered and thereafter pay Rs. 2,00,000/-. However, the petitioners were unsuccessful in getting the registration. It appears that on 5.2.2015, when the matter was listed before the Tribunal for reporting compliance, the petitioners expressed its difficulties and requested that the matter be adjourned to the next day and, accordingly, the matter was adjourned on 6.2.2015. It is the case of the petitioner that because of such technical errors in depositing challans, the petitioner was not able to make pre-deposit by 6.2.2015. On 6.2.2015, the learned advocate for the petitioners submitted before the Tribunal that they could not deposit the amount due to some problem in depositing challan. The Tribunal, in view of the fact that compliance had not been reported in terms of its order dated 18.12.2014, by an order dated 6.2.2015, dismissed the appeals for failure to report compliance. Being aggrieved, the petitioners have filed the present petitions. 7. Mr. The Tribunal, in view of the fact that compliance had not been reported in terms of its order dated 18.12.2014, by an order dated 6.2.2015, dismissed the appeals for failure to report compliance. Being aggrieved, the petitioners have filed the present petitions. 7. Mr. D.K. Trivedi, learned advocate for the petitioners submitted that the petitioners were always ready and willing to comply with the directions issued by the Tribunal for pre-deposit, however, in view of the circumstances noted hereinabove, due to some technical problem with the server of the website of Central Board of Excise and Customs, the petitioner was not able to make the pre-deposit within the time stipulated by the Tribunal and there was one day's delay in depositing such amount after the Tribunal granted a further period of one day's time. It was, accordingly, urged that on account of one day's delay, the Tribunal ought not have dismissed the appeals and that the interest of justice requires that the appeals of the petitioners be restored. 8. On the other hand, Mr. Sudhir Mehta, learned senior standing counsel for the respondents, placed reliance upon the averments made in the affidavit-in-reply filed on behalf of the respondents No. 2 and 3. It was submitted that the present petitions have been filed after a considerable delay of more than one and a half years from the date of the impugned order passed by the Tribunal. 9. It is an accepted position as is evident from the averments made in the affidavit-in-reply filed on behalf of the second and third respondents, that the petitioners have deposited the sum of Rs. 2 lakhs. It has also been averred in the affidavit in reply that it is a fact that every assessee is required to pay duty or any sum payable under the Central Excise Act or rules made thereunder electronically though internet banking, for which central excise registration number is mandatory; though the assessee had surrendered central excise registration, they could still deposit the duty amount or pre-deposit, as the case may be, in the manner prescribed; and that eventually, the fact remains that the petitioner had electronically deposited the pre-deposit of Rs. 2,00,000/- quoting the central excise registration, which they had already surrendered. Thus, it appears that it is mandatory for an assessee to quote the central excise registration number for the purpose of making the pre-deposit. 2,00,000/- quoting the central excise registration, which they had already surrendered. Thus, it appears that it is mandatory for an assessee to quote the central excise registration number for the purpose of making the pre-deposit. It appears that in the facts of the present case, the petitioners were advised by the consultant to get the fresh registration and necessary steps were being taken in that regard. Ultimately, the pre-deposit was made two days' late from the date stipulated in the order dated 18.12.2014 of the Tribunal whereby the petitioners were directed to make the pre-deposit within a period of six weeks from the date of the order and one day after 6.2.2014, which was the extended time granted by the Tribunal. From the facts, as emerging from the record, there does not appear to be any deliberate intention on the part of the petitioner to delay payment of the pre-deposit. It is manifest that the petitioner was all the time trying to make the pre-deposit for the purpose of which it was required to get a central excise registration number. Moreover, on account of some server problem the amount, though arranged for could not be deposited within the time granted by the Tribunal and there as a delay of two days in making the pre-deposit. In the opinion of this court, the delay of two days in making the pre-deposit in the circumstances narrated above, cannot in any manner be said to be so considerable so as to warrant dismissal of the appeals. 10. Insofar as delay in filing the present petitions are concerned, the petitioner has explained the same in detail in paragraph 8-H of the memorandum of the petition and has also annexed supporting documents on record to show that the concerned Director, viz. the second petitioner, Mr. Gautam Shantilal Shah, who was managing the affairs of the company, was hospitalised and was undergoing medical treatment during the said period. the second petitioner, Mr. Gautam Shantilal Shah, who was managing the affairs of the company, was hospitalised and was undergoing medical treatment during the said period. Having regard to the totality of the facts as emerging from the record as well as considering the fact that if at all the appeals are restored to file, at best, the petitioner's appeals would be heard on merits and no prejudice would be caused to either of the parties, more so, having regard to the fact that the amount directed by the Tribunal to pre-deposit had ultimately been deposited within a day from the expiry of the extended period of one day granted by the Tribunal, the court is of the view that the petitions deserve to be allowed. 11. For the foregoing reasons, the petitions succeed and are, accordingly, allowed. The impugned order dated 6.2.2015 passed by the Tribunal is hereby quashed and set aside. Consequently, the appeals being E/12074-12076/2014 shall stand restored to the file of the Tribunal to be heard on merits in accordance with law. Rule is made absolute accordingly with no order as to costs.