ORDER
V.P. Gulati, Vice President
1. The matter was posted to-day for furnishing information regarding guarantee to be executed by the appellants in terms of the order of the Hon’ble High Court of Karnataka in W.P. No. 3875/95. The appellants had filed the Writ Petition and had impugned the order of the Tribunal under which they were directed to pre-deposit a sum of Rs. 13 Lakhs under Section 35F of the Central Excise Act. The Hon’ble High Court in this connection has observed as under :
I may notice here that though on Company being declared as sick the Industrial Company acquires substantive right of dispensation from predeposit, but while doing so the Appellate Authority has to take note of the interest of the revenue as well, which in such situation would be to have some collateral security against the disputed demands. Therefore, the Appellate Authority will be well within its jurisdiction to insist upon the industrial company to furnish sufficient security for availing the said benefit of dispensation by way of immovable property or some other collateral security. But the same cannot be by way of Bank guarantee or cash.
After the High Court order was brought to the notice of the Tribunal when the matter came up for hearing on 21-2-1997, we had adjourned the matter at the request of the learned Advocate to enable him to get instructions as to the nature of the guarantee that would be furnished by the appellants in terms of the orders of the Hon’ble High Court. On 17-3-1997 when the matter again came up, the learned Advocate informed that all the properties of the appellants had already been mortgaged to financial institutions and he could not enlighten us as to the manner in which the appellant company would be complying with the requirement of the order of the Hon’ble High Court. Further time was, therefore, allowed to enable the learned Advocate to get instructions as to the nature of the guarantee as envisaged in the order of the Hon’ble High Court that would be offered by the appellants and he was asked to file an application in this regard to enable the Departmental Representative to get instruction thereon.
2. To-day when the matter came up for hearing, the learned Advocate has placed a letter before us addressed to him which has been signed by one Deputy Manager (Taxation) wherein he has stated that the company was under severe financial problems and the activities of the company had been suspended and it has been stated that the appellants will not have access to the records.
3. We observe the company as such is not dissolved and it is not the case that the management of the company has been suspended and that there is nobody looking after the affairs of the company. When a direction had been given by the Hon’ble High Court and the Tribunal in pursuance to that had offered the appellants an opportunity to furnish the necessary guarantee or to inform as to the nature of the guarantee that would be offered, it was expected that either the Chairman or the Managing Director of the Company or a senior person in-charge of the affairs would come on record in response to the direction given. The learned Advocate informs that in pursuance to the directions given by the Tribunal he had already sent a communication to the company and in view of the difficulties explained by the said Deputy Manager, he is not able to get a response from them. We are afraid the management is taking the matter rather lightly both in regard to the direction given by the Hon’ble High Court as also by the Tribunal. The appellants have been given enough latitude and no further indulgence in this regard can be shown. In as much as the appellants have not complied with the directions given by the Hon’ble High Court in compliance with the requirements of Section 35F of the Central Excise Act, the appeal, therefore cannot be entertained and the same is, therefore, dismissed. In the circumstances the Miscellaneous application is also dismissed. The appellants are given the liberty for reviving of the appeal within a reasonable time subject to the compliance of the order of the Hon’ble High Court and on an application being filed by the appellants in this regard the matter will be disposed of in accordance with law.