SCA/6693/2008 5/ 5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6693 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE M.S.SHAH HONOURABLE MR.JUSTICE D.H.WAGHELA ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= CHOKSI SILK MILLS & 1 - Petitioner(s) Versus UNION OF INDIA & 2 - Respondent(s) ================================================= Appearance : MR DEVANG NANAVATI for Petitioner(s) : 1 - 2. MR RJ OZA for Respondent(s) : 1-3 MR HARIN P RAVAL for Respondent(s) : 1-3 NOTICE SERVED BY DS for Respondent(s) : 2, DS AFF.NOT FILED (N) for Respondent(s) : 3, ================================================= CORAM : HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE D.H.WAGHELA Date : 24/06/2008 ORAL JUDGMENT
(Per
: HONOURABLE MR.JUSTICE M.S.SHAH)
RULE.
Mr.R.J. Oza, learned standing counsel for the Central Government
waives service of Rule for the respondents.
2. In
this petition under Article 226 of the Constitution, the petitioners,
i.e. Choksi Silk Mils and one of its partners, have challenged the
orders dated 09.08.2007, 15.10.2007, 20.11.2007 and 27.03.2008
(Annexures A, B, C and H respectively) of the Customs, Excise and
Service Tax Appellate Tribunal, Ahmedabad Bench in Appeal Nos.E/643
and 644 of 2007 and the stay applications made therein.
3. In
view of the order that we propose to pass, it is not necessary to set
out the facts in detail.
Respondent
No.3 passed an order-in-original confirming the demand of Cenvat
credit of Rs.93,64,004/- and also imposed penalty of an equal
amount. The said order dated 30.10.2006 also demanded interest
from petitioner No.1 from the due date. Personal penalty was also
imposed on petitioner No.2. The petitioners challenged the said
orders before the Tribunal and preferred stay applications. By order
dated 09.08.2007, the Tribunal directed the petitioners to make
pre-deposit of Rs.40 lacs in addition to the payment of Rs.4 lacs
already made during the course of the investigation. For making such
deposit, eight weeks time was granted. The modification applications
made by the petitioners came to be rejected on 15.10.2007, but the
time for making pre-deposit was extended and compliance was to be
reported on 20.11.2007. The petitioners did not comply with the
order of pre-deposit but, again, made an application for modification
of that order. Again, while rejecting the modification application,
the Tribunal granted further extension of two weeks and compliance
was to be reported on 04.12.2007. In the writ petition, filed by the
petitioners before this Court, by order dated 19.12.2007, the
petitioners were directed to make the deposit of Rs.40 lacs within
three months and till then, the Tribunal was directed not to dismiss
the appeals.
4. By
18.03.2008, the petitioners deposited only Rs.12,78,000/- and filed
Misc. Civil Application No.1116 of 2008 before this Court for
extension of time limit for depositing the balance amount of
Rs.27,22,000/-. After the said application was preferred before this
Court on 18.12.2007, the petitioners requested the Tribunal by
application dated 19.03.2008 to grant some more time for reporting
compliance. It appears that the petitioners requested the Tribunal
to defer the hearing for some more time, because the M.C.A. filed
before this Court for extension of time limit was fixed for hearing
on 28.03.2008. However, the Tribunal dismissed the appeals on
27.03.2008 on the ground of non-compliance of the pre-deposit order.
Thus, that M.C.A. came to be disposed of by this Court on 15.04.2008
on the ground that the application had become infructuous. The
application was allowed to be withdrawn with liberty to challenge the
concerned orders in a substantive writ petition.
5. The
petitioners have, now, moved this Court with the present petition
submitting that when the petitioners’ application for extension being
M.C.A. No.1116 of 2008 was pending before this Court and was fixed
for hearing on 28.03.2008, the Tribunal ought not to have dismissed
the appeal on 27.03.2008 on the ground of non-compliance of the
pre-deposit order.
6. At the first
hearing of this petition, learned counsel for the petitioners had
stated that undertaking that over and above Rs.12,78,000/- already
deposited earlier towards the liability under consideration
(including adjustment of Rs.5,00,000/- against the refund sanctioned
by the Assistant Commissioner, Central Excise Division ý 1, Surat
on 10.03.2008), petitioner No.1 would deposit a further sum of
Rs.5,00,000/- by 01.05.2008 and the remaining sum of Rs.22,22,000/-
will be deposited by 31.07.2008. This Court issued notice and
granted ad-interim stay against coercive recovery.
7. Mr.R.J. Oza,
learned standing counsel appears for the respondent authorities and
opposes the petition on the ground that the Tribunal itself had
granted several extensions and this Court had also granted three
months’ time to make the pre-deposit. It is submitted that the
petitioners having failed to avail of these opportunities, no further
indulgence may be granted.
8. Having heard the
learned counsel for the parties, it appears that several
opportunities were granted to the petitioners to comply with the
pre-deposit order. The learned counsel for the petitioners, however,
submits that it was on account of the financial difficulties
that the petitioners were not in a position to comply with the
pre-deposit order and that, for the delay in complying with the
pre-deposit order, the petitioners are prepared to deposit some
additional amount, which may be treated as deposit towards the
disputed liability.
9. In view of the
above submissions, we are of the view that the interests of justice
would be served if the petitioners are directed to deposit additional
sum of Rs.4 lacs over and above the amount of Rs.40 lacs as
stipulated in the pre-deposit order of the Tribunal.
10. Mr.Nanavati,
learned counsel for the petitioners, however, submits that since the
petitioners are required to pay the remaining sum of Rs.22,22,000/-
on the basis of the pre-deposit order of the Tribunal, and now, there
will be additional liability of Rs.4 lacs for paying the amount of
Rs.26,22,000/-, the petitioners may be granted some longer time.
The request appears
to be reasonable.
11. In view of the
above discussion, we direct that the petitioners shall deposit a
total amount of Rs.44 lacs including the amount of Rs.12,78,000/-
lacs already deposited by the petitioners earlier. We further direct
that the remaining amount of Rs.26,22,000/- shall be deposited by the
petitioners in four equal monthly installments. The first installment
shall be paid by 07.07.2008 and the subsequent installments shall be
paid on the 7th day of each succeeding months. The
petitioners shall file the revised undertaking on the aforesaid basis
within one week from today. After the petitioners file such under
taking, the Tribunal shall restore Appeal Nos. E/643 and 644 of 2007
and shall hear them at the earliest after the petitioners deposit
Rs.26,22,000/- within the above time limit.
Subject to the above
directions, the impugned orders dated 09.08.2007, 15.10.2007,
20.11.2007 and 27.03.2008 are hereby set aside and shall be
substituted by the aforesaid directions. In case, the petitioners
fail to comply with the above directions, the orders passed by the
Tribunal shall stand restored.
12. Rule is made
absolute in the aforesaid terms.
In the facts and
circumstances of the case, the petitioners are directed to pay the
respondents costs of Rs.2,000/- in one set within one month from
today.
(M.S. SHAH, J.)
(D.H.WAGHELA, J.)
Hitesh