2009 (5) TMI 572 - AT - Central Excise

Application for restoration - it is the case of the applicant that there were financial crises which prevented the applicant from depositing the amount in terms of the order under section 35F of this Tribunal - The appeals once dismissed for non-compliance of statutory obligation under the said Act, cannot be restored without a sufficient cause in that regard is made out - Decided against the assessee

Issues Involved:
1. Restoration of appeals dismissed for non-compliance with the conditions of a stay order.
2. Jurisdiction and powers of the Tribunal to restore appeals dismissed for non-compliance.
3. Financial hardship as a reason for non-compliance with pre-deposit requirements.
4. Legal precedents and their applicability to the restoration of appeals.

Detailed Analysis:

1. Restoration of Appeals Dismissed for Non-Compliance with the Conditions of a Stay Order:
The appellants sought restoration of appeals dismissed due to their failure to comply with the conditions attached to the stay order issued by the Tribunal. The Tribunal had initially directed the appellants to deposit a sum of Rs. 3,50,000/- within six weeks, while waiving the remaining amount. However, the appellants failed to comply with this directive, leading to the dismissal of their appeals for non-compliance with Section 35F of the Central Excise Act, 1944.

2. Jurisdiction and Powers of the Tribunal to Restore Appeals Dismissed for Non-Compliance:
The Tribunal examined its jurisdiction and powers to restore appeals dismissed for non-compliance. It referred to Sections 35C and 35D of the Central Excise Act, 1944, along with Section 129C of the Customs Act, 1962, which outline the Tribunal's procedural powers. The Tribunal acknowledged that while the Act does not explicitly provide for the restoration of appeals dismissed for default, the Apex Court in Union of India v. Paras Laminates (P) Ltd. held that the Tribunal, being a judicial body, possesses incidental and ancillary powers to make its statutory powers effective. This includes the power to restore appeals dismissed for non-compliance, provided sufficient cause is shown.

3. Financial Hardship as a Reason for Non-Compliance with Pre-Deposit Requirements:
The appellants argued that financial crises prevented them from depositing the required amount within the specified period. They claimed to have eventually deposited the full amount of Rs. 14,13,048/- (duty and penalty) on 29-8-08. The Tribunal noted that the initial stay application did not mention financial difficulties, and the appellants failed to provide detailed evidence of their financial crises or the timeline of overcoming these difficulties. The Tribunal emphasized that mere statements of financial hardship are insufficient without substantiating evidence.

4. Legal Precedents and Their Applicability to the Restoration of Appeals:
The Tribunal reviewed various legal precedents, including:
- Scan Computer Consultancy v. Union of India: The Gujarat High Court held that the appellate authority should not deny the right of adjudication due to non-compliance with pre-deposit requirements if the appellant subsequently complies.
- Haryana Wool Industries v. Collector of Cus., New Delhi: The Supreme Court afforded an opportunity for adjudication on merits due to peculiar circumstances, but this did not establish a general principle for restoration powers.
- Premier Automobiles Ltd. v. CCE, Mumbai-III: The Tribunal restored the appeal subject to conditions in a different factual context.
- Commissioner of Central Excise, Indore v. Lalchand Wadhwani: The Tribunal dismissed the appeal for failure to make pre-deposit, emphasizing the mandatory nature of Section 35F.
- J.R. Shah v. CCE, Vadodara and Bahubali Plastics P. Ltd. v. CCE, Delhi-I: The Tribunal dismissed restoration applications due to lack of justifiable reasons for non-compliance.

The Tribunal concluded that while it has the power to restore appeals, such restoration requires sufficient cause for non-compliance. In the present case, the appellants failed to provide adequate evidence of financial hardship or the timeline of overcoming it, leading to the rejection of their restoration applications.

Conclusion:
The Tribunal dismissed the applications for restoration of appeals due to the appellants' failure to demonstrate sufficient cause for non-compliance with the pre-deposit requirements. The Tribunal emphasized the mandatory nature of Section 35F and the need for substantiated evidence of financial hardship to justify restoration.

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