2016 (1) TMI 341 - HC - Central Excise

Restoration of appeal - Whether mere attachment of property be equated as pre-deposit - petitioners had pleaded total inability to make good the pre-deposit. The petitioners had urged the Department to sell the attached properties and appropriate sale proceeds towards the pre-deposit requirement. If this was done timely, the petitioners could have pursued the appeals on merit. In any case, by efflux of time, the petitioners could not be denied the opportunity to argue the appeals on merits. Held that - In case of Kiritkumar Jawaharlal Shah v. Union of India 2014 (9) TMI 244 - Supreme Court of India , the Supreme Court had granted permission to pursue appeal on merits even when it was seen that the requirement of pre-deposit was satisfied after a long delay. Division of this Court, likewise, in Priya Dyers v. Commissioner of Central Excise 2013 (7) TMI 533 - GUJARAT HIGH COURT observed that, for want of fulfilling the requirement of pre-deposit, the assessee s right of statutory appeal would get destroyed and the decision adverse to him would get confirmed without decision on merits. It was observed that the Court should take a relaxed view of belated compliance of requirement of pre-deposit provided there is any explanation for the delay. In the result, the impugned order of the Tribunal dated 11.06.2015 is set aside. Both the appeals of the petitioners are restored to file and may be heard on merits.

Summary

Issues:
Challenging order of Customs, Excise & Service Tax Appellate Tribunal regarding pre-deposit requirement for appeals.

Analysis:
The petitioners challenged the Tribunal's order requiring a pre-deposit of one crore rupees for their appeals. The petitioners argued their inability to make the deposit, suggesting the attached properties be sold to cover the pre-deposit. The Tribunal rejected this, stating property attachment does not equate to pre-deposit. Subsequently, the Department auctioned the properties, recovering around 85 lakhs, in addition to the petitioners' earlier deposit of 16 lakhs. The petitioners sought to proceed with the appeals, but the Tribunal refused. The petitioners contended that due to financial constraints, they couldn't make the pre-deposit, urging the Department to sell the attached properties to fulfill the requirement.

The Department confirmed the auction proceeds of the properties were close to 85 lakhs, and the total amount exceeded the required pre-deposit of one crore. Citing relevant case laws, the Court noted instances where delayed compliance with pre-deposit requirements did not hinder the right to appeal on merits. The Court emphasized the need for a relaxed view on belated compliance if reasons for the delay are provided. Consequently, the Court set aside the Tribunal's order, restoring the appeals for a hearing on merits. The total amount with the Department would serve as the pre-deposit, subject to the appeals' final outcome. The petition was disposed of accordingly, with direct service permitted.