2015 (10) TMI 1213 - AT - Central Excise

Restoration of appeal - Appeal dismissed for non compliance with pre deposit - Section 35F - Held that - The order dated 13.03.2013 by which the appeals filed by these three appellants had been dismissed is an ex parte order as the order itself mentions that none was present for the appellants nor there is any adjournment application. Moreover, while separate stay applications had been filed by the above mentioned three appellants along with stay application filed by M/s. Puneet Exports INC, in the order dated 13.03.2013, there is absolutely no direction for these appellants regarding pre-deposit. Para-4 of the stay order dated 13.03.2013 simply directs that the appellants to deposit an amount of ₹ 87,44,929/- within four weeks and also clarifies that this order has imposed pre-condition in respect of all these applicants. Hon ble Delhi High Court in case of Rajinder Gaur Vs. CCE reported in 2013 (6) TMI 58 - DELHI HIGH COURT in the background of the fact that while the main appellant had been directed to make pre-deposit with the observation that if it was made, other co-appellants were not required to make pre-deposits and there was no direction given that if the main appellant defaulted, other appellants would also be considered as defaulters, the appeals of the other appellants cannot be dismissed for non-compliance and that without dealing with the individual appellant s case for stay, the Tribunal ought not to have mechanically assumed default and dismissed their appeals - Appeal restored.

Summary

Issues:
1. Imposition of duty demand and penalties on multiple appellants.
2. Dismissal of appeals for non-compliance of pre-deposit requirements.
3. Appeal against the Tribunal's order and the subsequent High Court decision.

Analysis:
1. The Commissioner's order imposed duty demand and penalties on various appellants, including M/s. Puneet Exports Inc. and three other appellants - M/s. Century Knitters (India) Ltd., Natraj Fabrics, and Nimisha Knits. The Tribunal directed M/s. Puneet Exports Inc. to deposit a specific amount within a given time frame, but there was ambiguity regarding the pre-deposit requirement for the other appellants. Due to non-compliance by M/s. Puneet Exports Inc., the Tribunal dismissed the appeals of all appellants for not meeting the pre-deposit conditions under the Central Excise Act.

2. Following the dismissal, the three appellants - M/s. Century Knitters (India) Ltd., M/s. Natraj Fabrics, and M/s. Nimisha Knits appealed to the Punjab & Haryana High Court. The High Court noted the absence of the appellants during the initial order and granted them the liberty to file applications for modifying or setting aside the order. The appellants subsequently filed applications to recall the stay order and restore their appeals.

3. Upon hearing both sides, it was observed that the order dismissing the appeals in 2013 was ex parte as the appellants were not present, and there was no specific direction for pre-deposit for the three appellants. Citing a Delhi High Court case, it was determined that the Tribunal erred in assuming default without considering individual cases for stay. Consequently, the Tribunal recalled the stay order and restored the appeals for further consideration, emphasizing the need for a hearing on merits. The miscellaneous applications were disposed of, and the stay applications were scheduled for a hearing on a specified date.

This detailed analysis encompasses the issues of duty demand, penalties, non-compliance with pre-deposit requirements, appeal procedures, and the subsequent legal actions taken by the appellants to challenge the Tribunal's decision.