2008 (1) TMI 866 - HC - Central Excise

Summary

Issues Involved:
1. Validity of the ACP fixed by the Commissioner of Central Excise.
2. Legality of the conditional stay order passed by the Appellate Tribunal.
3. Dismissal of the appeal by the Appellate Tribunal due to non-compliance with the conditional stay order.

Issue-wise Detailed Analysis:

1. Validity of the ACP Fixed by the Commissioner of Central Excise:
The petitioner, M/s. Arya Steels Private Ltd., challenged the validity of the ACP fixed by the Commissioner of Central Excise at 4930.864 MTs. The petitioner contended that the order dated 23-2-1998 was an ex parte order passed without proper application of mind and disregarded earlier court orders. Despite the Tribunal's directive for fresh adjudication, the Commissioner reaffirmed the same ACP without giving proper opportunity to the petitioner, allegedly violating principles of natural justice. The High Court, however, determined that the merits of the Commissioner's order dated 4-9-2003 should be adjudicated by the Appellate Tribunal, not by the High Court under Article 226.

2. Legality of the Conditional Stay Order Passed by the Appellate Tribunal:
The Appellate Tribunal, while entertaining the appeal, passed a conditional stay order on 26-5-2004, requiring the petitioner to deposit Rs. 17 lakh out of the total duty demanded of Rs. 22,11,043/-. The petitioner argued that the Tribunal failed to adjust the amount already paid and the refund due, and that the pre-deposit condition caused undue hardship. The High Court upheld the Tribunal's conditional stay order, citing Section 35F of the Central Excise Act, which mandates such deposits unless undue hardship is proven. The Tribunal's order was deemed lawful and within jurisdiction, as it followed the statutory requirements.

3. Dismissal of the Appeal by the Appellate Tribunal Due to Non-Compliance with the Conditional Stay Order:
The petitioner failed to comply with the conditional deposit by the stipulated date, leading to the dismissal of the appeal by the Appellate Tribunal on 3-8-2004. The High Court referenced similar cases, such as Raju Metal Industries v. Union of India, where the Delhi High Court and the Supreme Court upheld the Tribunal's authority to dismiss appeals for non-compliance with pre-deposit orders. The High Court directed the petitioner to approach the Tribunal again to request an extension or reduction of the pre-deposit amount, emphasizing that the Tribunal should consider the petitioner's financial difficulties and potentially provide further concessions.

Conclusion:
The High Court concluded that it could not adjudicate the merits of the Commissioner's order dated 4-9-2003, which should be addressed by the Appellate Tribunal. The conditional stay order and subsequent dismissal of the appeal by the Tribunal were upheld as lawful and within jurisdiction. The petitioner was advised to seek further relief from the Tribunal regarding the pre-deposit conditions. The writ petition was disposed of without any order as to costs, and no opinion was given on the validity of the Commissioner's order, which remained subject to the Tribunal's appeal process.