2015 (6) TMI 337 - HC - Central Excise

Waiver of pre deposit - Ex parte order - Held that - It is apparent that no reasonable explanation has been furnished by the Petitioner for non-appearance on 7-1-2009 much less any unavoidable reason or circumstances. A litigant can certainly seek an adjournment of a case but not as a matter of right much less can it take the Tribunal or Court for granted in adjourning the matter at the wish of the litigant. Adjournment of the case on a prefixed date is the discretion of the Court to be exercised reasonably and prudently keeping all aspects and interest of the parties in mind. Nothing prevented the Petitioner from ensuring appropriate representation on its behalf on 7-1-2009 and making the same prayer. If the Petitioner adopted a presumptive stand in its favour it has only itself to blame. If that were not enough, the petitioner did not bother to even ascertain as to what was next date fixed before the Tribunal and again ignored appearance on 12-2-2009 at its own risk. Adjournment before a Court or a Tribunal cannot be sought by sending a Fax letter. If that were to be so the entire system of adjudication would itself collapse for uncertainty of hearing. - petitioner is directed deposits the sum of ₹ 50,00,000/- with interest at the rate of 9% per annum from 12-2-2009 within a maximum period of 30 days - Decided conditionally in favour of assessee.

Summary

Issues:
Delay in filing the case, CENVAT duty demand, penalty, interest, pre-deposit order, undue hardship consideration, non-appearance before Tribunal, filing of Writ Petitions, retention of benefit, legal remedies pursuit, interest on delayed payment.

Analysis:
The judgment involves the consideration of condoning a significant delay in filing a case due to various legal proceedings undertaken by the Petitioner. The Petitioner challenged a demand for CENVAT duty, penalty, and interest before the Tribunal, seeking unconditional stay for pre-deposit, which was partially granted. However, the Petitioner failed to comply with the pre-deposit order, leading to the dismissal of the Appeal. The Petitioner argued that the order was passed ex parte without considering a request for adjournment and subsequently pursued legal remedies through Writ Petitions and fresh appeals. The Court analyzed the conduct of the Petitioner in pursuing these remedies and the reasons for non-appearance before the Tribunal on crucial dates.

The Court referred to Section 35F of the Central Excise Act, which mandates deposit of duty and penalty before the Appellate Tribunal, with discretion to dispense the deposit in cases of undue hardship. The judgment highlighted the importance of reasonable and fair exercise of this power, considering the circumstances of each case. The Court scrutinized the events leading to the non-compliance with the pre-deposit order, emphasizing the Petitioner's knowledge of the hearing dates and the lack of reasonable explanations for non-appearance.

The judgment assessed the Petitioner's argument of being a bona fide litigant pursuing legal remedies, contrasting it with the actual conduct before the Tribunal. The Court found it challenging to accept the Petitioner's claims of undue hardship or unavoidable reasons for non-compliance. Drawing on precedents, the Court emphasized the need for establishing undue hardship and the consequences of non-compliance with pre-deposit orders.

Ultimately, the Court conditionally set aside the order of dismissal, giving the Petitioner an opportunity to deposit the required amount with interest within a specified timeframe. Failure to comply within the given period would result in the dismissal of the writ petition. The judgment concluded with directions for the Tribunal to proceed with the Appeal on merits based on the compliance with the conditional order.

In conclusion, the judgment delves into the intricacies of pre-deposit orders, undue hardship considerations, litigant conduct, and legal remedies pursuit, providing a nuanced analysis of the case while balancing the interests of the parties involved.