By TIOL News Service

MUMBAI, FEB 11, 2014: THE Tribunal vide its order dated 29 October 2013 directed the appellant to deposit an amount equal to 50% of the duty confirmed (i.e. 50% of Rs. 41,48,337/-) and penalty of Rs. 5,00,000/. The Tribunal further directed appellant no.2 to deposit penalty of Rs. 1,00,000/- out of the penalty of Rs. 10,00,000/- imposed by the Adjudicating Authority.
Against this order of pre-deposit, the appellants are before the High Court.

Incidentally, the appeal filed on 27th December 2013 was listed for hearing on 20th January, 2014 but could not be taken up for admission and was adjourned.  This fact was informed by the appellant to the Registrar of the Tribunal with a request that the matter listed for compliance on 21st January be adjourned to any other date after 4th February as convenient to the Tribunal.  However, although this fact was informed on the date of hearing, the Tribunal did not grant any adjournment and dismissed the appeal for non-compliance on 21 January 2014 itself.
Be that as it may, the High Court began its observations with the following caustic remarks –

"…we are shocked to note that time and again the Tribunal has been dismissing appeals of the appellants for non-compliance with the order of pre-deposit even in cases where the owner directly pre-deposits, the Tribunal is informed about the appeal was listed before this Court for admission."

When the High Court asked the appellant to place on record a copy of the said order dated 21 January 2014, it was informed that the Tribunal has published a general notice on its website to the effect that for want of funds, the post office does not accept the postal communication from the Registry of the Tribunal and, therefore, no individual intimation will be given by the post. [See DDT 2272]

The High Court quipped - This is very sorry state of affairs.

It was further informed that the order of dismissal was pronounced in open court by the Tribunal but the same is not yet ready with the Registry of the Tribunal.

The High Court added - Apart from the above administrative issue of the Tribunal, it is most unfortunate that the Tribunal did not wait for admission hearing of this appeal by this Court.

Adverting to the orders passed in Jaiprakash Strips Ltd. vs. Union of India, (2009-TIOL-630-HC-MUM-CX) and Saswad Mill Sugar Factory Ltd. vs. Commissioner of Central Excise, Pune-III, (2013-TIOL-898-HC-MUM-ST) the High Court held that the dismissal of the appeal was completely uncalled for.
And further observed –

"10. Even so, we are of the view that when the Tribunal itself found that it was not a case requiring the appellant no.1 company to deposit the entire duty amount but only 50% of the duty demand. It follows that ordinarily the Tribunal should not direct the appellant to deposit any amount towards penalty. We are of the view that where the Tribunal has granted a partial dispensation with pre-deposit, then in such cases it should not normally direct pre-deposit attributable to the penalty amount. In cases where the Tribunal is of the view that notwithstanding the grant of partial dispensation with pre-deposit, the amount of penalty or part of it should be deposited, the Tribunal shall give strong reasons to indicate why the deposit attributable to penalty amounts should be made. In fact, we have noticed that the Tribunal in its orders, while granting partial deposit, has generally not been insisting on deposit of penalty amount."

Accordingly, the High Court set aside the order of the Tribunal dated 29 October 2013 directing appellant no.1 to deposit a penalty of Rs. 5,00,000/- and directing appellant no.2 to make a pre-deposit of Rs. 1,00,000/- towards penalty. The rest of the order of the Tribunal was not disturbed and the appellants were directed to deposit the amount equal to 50% of the duty confirmed within eight weeks.
And the parting comment -

"13. Having regard to the fact that this is the third instance which is brought to our notice where the Tribunal has dismissed an appeal for noncompliance of the said order of the Tribunal in spite of having been informed about the appeal before this Court being on board or it is adjourned to a near date for admission, we direct that henceforth the Tribunal shall not dismiss any appeal for noncompliance on the above ground and give reasonable time of about a couple of weeks to the appellant to obtain urgent orders from this Court where the Tribunal is informed about the appeal pending before this Court at the admission stage. The Tribunal shall at least give the parties 2 weeks’ time to move this Court for early hearing of the appeal before this Court."

(See 2014-TIOL-180-HC-MUM-CUS)