By TIOL News Service

AHMEDABAD, AUGUST 20, 2014: BY an o-in-o the adjudicating authority confirmed a CE demand of Rs.3.35 crores against the petitioner and also imposed interest and equivalent penalty.

An appeal was filed before the CESTAT along with an application for condonation of delay of 406 days in filing the appeal.

The reason given for the delay is that the authorised person of the Company advised that before filing an appeal, the Company will have to deposit the entire amount of duty and penalty confirmed and since the Company was not in a position to deposit the same, they did not file an appeal within the period of limitation.

The CESTAT was not satisfied with this explanation and, therefore, dismissed the COD application and the appeal.

Now, the appellant is before the High Court seeking quashing of this order.

The only submission made by the petitioner is that they have a meritorious case; that they were wrongly advised by the authorized person of the company leading to their not filing appeal on time; that the order passed by Tribunal in refusing to condone the delay should be set aside and the Tribunal be directed to decide the appeal on merits.

The counsel for the Revenue submitted that in this case there is more than what meets the eye. The following are the revelations made in the affidavit-in-reply:

++ Other co-noticee had preferred appeals against the orders of penalty imposed vide Order-in-Original. However, the petitioners did not prefer appeal within the period of limitation deliberately.

++ The properties of the Company have already been sold and the same have been purchased in auction by the close relatives of the petitioners.

++ After the Order-in-Original, the department started recovery proceedings and two Companies formed in the name of M/s.Neev Technocast Pvt. Ltd and M/s.Neev Metologies Pvt. Ltd. have applied for the issuance of Central Excise registration on 13/1/2013 having common Directors Mr.Sagar Vinod Bhai Parsana and Mrs.Nisha Mohit Bhai Parsana for manufacturing of moulding patterns and aluminum coil/foil at the address of the petitioner company.

++ However, they were denied registration on the ground that the petitioner was already existing at the given address and for the same premises no other registration can be issued.

++ Thereafter again both the new entrants applied for the Central Excise Registration on 11/6/2013 but were not recommended, since the petitioner No.1 still existed at the given address and holding Registration Certificate and also huge government dues were pending against the petitioner Nos.1 and 2.

++ On 25/6/2013, surrendered the registration certificate of the petitioner No.1 through ACES, a departmental website and delivered a printed copy to the department on 26/6/2013 with the wrong declaration that "I/We also declare that there is no government due pending against us and that there is no demand pending against us under Central Excise Act, 1944 (1 of 1944) and rule made thereunder pending as on the date of surrendering the Registration Certificate".

++ The petitioner No.2 himself acknowledged the Order-in-Original No.71/Commr./2012 dated 19/21.11.2012 on 8/12/2012 under which the duty and penalties of Rs.8.71 Crores was confirmed.

It is further submitted that the aforesaid conduct on the part of the petitioners lacks bonafide and therefore, the petitioners are not entitled to any relief. Also the land and buildings including the machineries has been disposed of and again acquired by the relatives of the default company and in such a way the huge government dues were put at stake. It is, therefore, submitted that extraordinary jurisdiction under Article 226 of the Constitution of India may not be exercised in favour of the petitioners and the petition be dismissed. Reliance is also placed on the decisions in Esha Bhattacharjee Versus Managing Committee of Raghunathpur Nafar Academy and others, (2013) 12 SCC 649 and Basawaraj and another Versus Special Land Acquisition Officer (2013) 14 SCC 81 in support.

The High Court extracted the Affidavit-in-reply filed by the Revenue and observed:

++ It is stated in Affidavit-in-reply filed on behalf of the respondents that the authorised person of the Company was the ex-employee of the department and therefore, the contention on behalf of the petitioners that he advised that before filing an appeal, the Company will have to deposit the entire amount of duty and penalty and since the Company was not in a position to deposit the entire amount of duty and penalty, they did not prefer appeal, cannot be accepted and is rightly not accepted by the learned tribunal.

++ There is no counter to the aforesaid Affidavit-in-reply filed on behalf of the respondents. Even considering the aforesaid facts and circumstances of the case, more particularly when there is a huge liability of approximately more than Rs.8 Crores and even now there is no property of the Company as the same has been sold and alleged to have been purchased by the close relatives of the petitioners and even in the premises of the petitioner No.1 Company, other Companies are running and they applied for Registration Certificate, we see no reason to interfere with the impugned order passed by the learned tribunal.

++ Even we suggested that if some reasonable amount towards duty and penalty liability confirmed is deposited, still the case of the petitioners can be considered, however, the learned advocate appearing on behalf of the petitioners has refused to accept the above and, therefore, we have no other alternative but to pass the order on merits.

Holding that there is no reason to interfere with the order passed by the tribunal, the petition was dismissed.

(See 2014-TIOL-1413-HC-AHM-CX)