2014 (12) TMI 645 - HC - Customs

Restoration of appeal - Dismissal of appeal by Tribunal - Non compliance of pre deposit order - Did the Tribunal fall into error in declining to restore the appeal dismissed on 1-11-2006 for non-compliance of the previous conditional stay of pre-deposit order - Held that - Post facto approval to the appellant to receive the amount, was concededly given much later, in 2013. Immediately on becoming aware of the same, an application was moved before the Tribunal to have the appeal restored. It is evident that the receipt of remittances and more importantly the extension of time were factors entirely beyond the appellant s control. Undoubtedly, the order dated 2-1-2007 passed by the Tribunal achieved finality; at the same time we are of the opinion that in the facts of the case the Tribunal did not cease to have any discretion in the matter and having taken into account these facts could have restored the appeal given that the post facto approval in respect of almost 90% of the amount in question was received in 2013. We are also of the opinion that Lindt Export (2011 (9) TMI 609 - DELHI HIGH COURT) is not an authority for the blanket order that in every case where the order achieved finality the Tribunal is bereft of jurisdiction. We also note that in that case the assessee/appellant had approached this Court feeling aggrieved by the CESTAT order after its appeal met with no success. The assessee carried the matter to Supreme Court, which had rejected its claim. Further more, the order was premised upon entirely different set of circumstances - the adjudicating authority in that case had held that the claim itself was bogus. In view of the above discussion, we are of the opinion that the substantial question of law has to be answered in favour of the appellant and against the Revenue. - Appeal restored.

Summary

Issues:
- Whether the Tribunal erred in declining to restore the appeal dismissed for non-compliance of the previous conditional stay of pre-deposit order?

Analysis:
The case involved the appellant who exported ready-made garments under the duty drawback scheme in 1999 but faced delays in receiving export proceeds within the prescribed time. The RBI extended the time for remittance for some exports until 2002. A show cause notice was issued in 2003 demanding withdrawal of the drawback. The Commissioner ordered recovery of the amount in 2005. The appellant approached CESTAT in 2006, seeking suspension of pre-deposit requirements. The Tribunal directed the appellant to deposit a specific amount, which was not complied with, leading to dismissal of the appeal in 2007.

The appellant later regularized a significant portion of the amount with RBI's approval in 2013 and sought restoration of the appeal, which was declined by CESTAT citing non-compliance with previous orders and undue delay. The appellant argued that the circumstances leading to non-compliance were beyond its control and emphasized the post facto approval received. The Revenue contended that the Court should not interfere, citing precedents and statutory provisions.

The High Court noted the appellant's substantial compliance with export requirements and the delayed receipt of remittances as the reason for the show cause notice. It acknowledged the post facto approval in 2013 and opined that the Tribunal still had discretion to restore the appeal, contrary to the Revenue's arguments. The Court distinguished a previous case cited by the Revenue, emphasizing the unique circumstances. Ultimately, the Court ruled in favor of the appellant, setting aside the CESTAT's order and directing the appeal to be restored for further consideration on merits.

The Court's decision highlighted the exceptional circumstances faced by the appellant, the importance of post facto approval, and the Tribunal's discretion in such cases. The judgment emphasized the need for a case-by-case analysis rather than a blanket approach, considering the specific facts and equities involved. The ruling provided relief to the appellant and underscored the importance of justice and fairness in legal proceedings.