By TIOL News Service

CHENNAI, MAR 11, 2016: FOR non-compliance of the pre-deposit requirement under Section 129E of the Customs Act, 1962, the CESTAT dismissed the appeal filed by the Assessee. Subsequently, the Appellant paid the deposit and thereafter, filed an application for restoration of appeal, which was dismissed vide Miscellaneous Order No.41282/2015, dated 14.10.2015, observing that the Tribunal had become functus officio after passing the order. Challenging the same, the appellant is before the High Court.

The contention of the Revenue is that the order passed by the CESTAT is perfectly justified, as the Tribunal had become functus officio, after the passing of the final order and that the Tribunal has no power to restore the appeal, once it is dismissed. The further contention is that the Tribunal has no discretion to reduce the quantum of pre-deposit as it had been permissible, prior to the amendment made to Section 35F of Central Excise Act, 1944.

The appellant submitted that the right to prefer an appeal is a statutory right touching the substantive right of the parties, while the provisions relating to pre-deposit is procedural in nature and that the procedural law is only a handmaid of justice and not the mistress of justice; having regard to the huge amount of pre-deposit to be made and also having regard to the financial hardship of the appellant (widow), the Tribunal should have been lenient in granting time and in any event, the Tribunal should have restored the appeal having regard to the merits of the claim involved in the main case.

After hearing both sides, the High Court held:

+ On the construction of the expression 'functus officio' to the facts of this case, it cannot be said that the Tribunal has become functus officio, once the Tribunal had passed an order, not on merits, not while finally determining the issue and not an order which has merged with the Appellate Court order.

+ When the Act or the Rules in question do not specifically prohibit restoration of an appeal, dismissed on the ground of non-deposit of the amount, the Tribunal certainly has the power and jurisdiction to recall its earlier order, if the ends of justice require such a course of action.

+ When Rule 20 provides for restoration of appeal in case when the appeal is dismissed for default, there is no reason as to why the power of restoration should not be exercised in case of non-compliance with the provision for pre-deposit.

+ Even if no pre-deposit is made, the appeal may not be heard, but the dismissal of the appeal for non-compliance of pre-deposit does not permit the appellate authority to refuse to restore the appeal upon compliance being shown.

+ Under Rule 41, the CESTAT has wide powers to prevent abuse of its process and to secure the ends of justice.

+ Since right to appeal is a statutory right and pre-deposit requirement under Section 129E of the said Act are only in nature of procedural requirements, but for delay in meeting the pre-deposit requirement, the primary right of appeal cannot be extinguished.

Accordingly, the High Court set aside the order of the Tribunal and restored the appeal on the file of the Tribunal.

(See 2016-TIOL-465-HC-MAD-ST)