Indu Nissan Oxo Chemicals Ind. … vs Union Of India (Uoi) Thr’ Its … on 10 July, 2006

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Gujarat High Court
Indu Nissan Oxo Chemicals Ind. … vs Union Of India (Uoi) Thr’ Its … on 10 July, 2006
Author: D Mehta
Bench: Y Meena, D Mehta


ORDER

D.A. Mehta, J.

Page 1520

1 This petition challenges order dated 10.1.2006 made by The Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The relevant prayer made in the petition reads as under:

(9) The petitioner, therefore, prays that:

(A) By issuing appropriate writ, order or direction, Your Lordships may be pleased to quash and set aside the impugned order passed by the Honourable Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Mumbai passed in stay application No. C/S/3356/05-MUM in appeal No. C/1396/05-MUM dated 10.01.2006 being Order No. S/101/W3B/06.C.1 (C.S.T.B.) and direct either the Hon’ble Tribunal, Mumbai or to the Commissioner of Customs, Kandla to decide the matter on merits without insisting the per-deposit of duty as per the impugned order which is annexed as Annexure A hereto.

Page 1521

2 The dispute between the petitioner and the Custom Authorities relates to classification of the product imported by the petitioner and consequential benefits claimed by the petitioner under different Notifications issued by Director General of Foreign Trade. The Custom Authorities did not accept the case of the petitioner and imposed penalty of Rs. 10,00,00,00/- (Rupees Ten crores) which came to be challenged by way of Appeal before CESTAT. The Appeal was accompanied by an application seeking waiver of the penalty imposed by the Commissioner of Customs. After hearing the parties CESTAT passed the following operative order:

Considering the submissions in this matter, prima facie, we are of the view that the waiver granted of the condition by the DGFTY is not applicable to the subject imports in this case. The other issues raised will have to be gone into in detail at the regular hearing. At this prima facie stage, considering the merits and the financial position as also the fact that this is the second round, we would consider this case to be appropriate to direct the applicants to terms of pre-deposit requirement to be effected under Section 129E of the Customs Act,1962. We would therefore direct the applicants to deposit Rs. 2,00,00,000/- (Rupees two crores only) and report compliance thereof within 12 (twelve) weeks, i.e. on 17.4.2006. On such compliance being reported, the matter would be listed for regular hearing. Failure to deposit and meet the requirements of Section of Section 129E calls for dismissal of the appeal without any further notice.

3 Mr. P.R. Nanavati, learned Advocate appearing on behalf of the petitioner has placed reliance on the following decisions:

(1) 1998 (28) R.L.T. 703 S.C. Sangfroid Remedies Ltd. v. Union of India.

(2) 2002(52) R.L.T. 1003 (Guj.) Duck Tarpulins Ltd. and Anr. v. Union of India and Ors.

(3) Texplast Engineers Ltd. v. Union of India.

(4) Star Pistons Pvt. Ltd. v. Union of India.

4 On the basis of the aforesaid decisions it was contended that as the petitioner has been declared to be a Sick Industrial Company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) by virtue of Section 22(1) of the said Act protection be granted to the petitioner and the direction to make pre-deposit of duty as a condition for hearing the Appeal be stayed /dispensed with. It was further submitted that in the impugned order, though the said fact is noted by CESTAT in paragraph No.4 no effect is given by waiving the full amount of pre-deposit. That the demand in question relates to the period prior in point of time to the date of registration under SICA. He, therefore, urges that the petition be allowed as prayed for.

5 Mr. R.J. Oza, learned Central Government Standing Counsel appearing on behalf of the respondent authorities invited attention to the Apex Court Page 1522 decision in case of Metal Box India Ltd. v. Commissioner of Central Excise, Mumbai to submit that no relief as prayed for can be granted merely because the petitioner has been registered as a Sick Industrial Unit under SICA, and no interference is called for in the impugned order made by CESTAT.

6 In the case of Metal Box India Ltd. (supra) the Supreme Court was called upon to consider the question whether the Tribunal was justified in dismissing the Appeal on the ground that the amount which was required to be deposited under Section 35F of the Central Excise Act, 1944, was not deposited within the period allowed by the Tribunal. While rejecting the contention raised on behalf of the assessee appellant before the Supreme Court it is laid down by the Apex Court as under:

We are afraid, we cannot accept the contention of the learned Counsel for reasons more than one. First, this aspect was not the subject matter of the order under challenge and, secondly, Section 22 of the Sick Industries Act, provides relief in regard to the proceedings which relate to (a) winding up of the industrial company; (b) execution, distress or the like against any of the properties of the industrial company; (c.) the appointment of a receiver in respect thereof, and (d) proceeding in regard to suit for recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company. Payment of pre-deposit covered under Section 35F of the Central Excise Tax Act, 1944 does not fall under any of the above-mentioned categories in Section 22 of the Sick Industries Act.

7 Section 35F of the Excise Act is pari-materia with Section 129E of the Customs Act, 1962. In light of the aforesaid authoritative pronouncement of law it is not possible to hold that CESTAT has committed any error in law while passing the impugned order. In absence of any legal infirmity no interference is called for in the impugned order.

8 Before parting, it is necessary to record that the earlier decision of the Apex Court in the case of Sangfroid Remedies Ltd. (supra) did not specifically deal with the issue as has been dealt with in the later decision of Metal Box India Ltd.(supra). Even if it could be perceived that there is a conflict between two decisions of the Apex Court, the view expressed in the later decision must prevail, more so when the same directly deals with the issue. Rest of the decisions are by different Benches of the High Court and have been rendered without considering the judgment in case of Metal Box India Ltd.(supra).

9 In the circumstances, the petition does not merit acceptance and is accordingly rejected. Notice discharged. There shall be no order as to costs.

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