2005 (9) TMI 77 - HC - Central Excise

Appeal against order of tribunal appeal dismissed by tribunal for non-compliance pre-deposit direction impugned order of tribunal is challenged by petitioner belatedly only when Department sought to recover the dues it indicates that order of tribunal was accepted by petitioner impugned order dismissing appeal is sustainable

Summary

Issues:
Challenge to order of Customs, Excise & Service Tax Appellate Tribunal regarding under-valuation leading to duty and penalty, modification of stay order, dismissal of appeal for non-prosecution, consideration of financial hardship, impact of registration with Board of Industrial & Financial Reconstruction (BIFR) on pre-deposit orders.

Analysis:
The petition challenged the order of the Customs, Excise & Service Tax Appellate Tribunal, West Zone, Mumbai, which required the petitioner to deposit 50% of the duty amount due to under-valuation discrepancies between invoices. The Tribunal directed the pre-deposit based on Section 35F of the Central Excise Act, 1944, and allowed waiver of the remaining duty and penalty during the appeal's pendency upon compliance. The petitioner sought modification of the stay order citing registration with BIFR under the Sick Industries Companies Act, but the Tribunal found no new grounds for modification, referencing a Bombay High Court decision. The appeal was eventually dismissed for non-prosecution due to the absence of the appellant and non-compliance.

The petitioner argued that being registered with BIFR should have exempted them from pre-deposit requirements, relying on a court decision. However, the High Court noted that the Tribunal had considered all relevant facts, including financial hardship and prima facie case, during the initial order. The Court clarified that BIFR registration does not automatically stay demands, highlighting a previous ruling that protection under SICA is limited to demands predating registration. The petitioner's failure to provide detailed demand period information and challenges to registration acceptance by secured creditors weakened their case.

The Court rejected the petitioner's plea, emphasizing that the challenge to the Tribunal's order came only after a recovery action was initiated, indicating prior acceptance of the order. The delayed challenge further undermined the petitioner's position, leading to the summary rejection of the petition. Overall, the Court found no merit in the petitioner's arguments and upheld the Tribunal's decision, emphasizing the lack of new grounds or exceptional circumstances warranting interference with the original order.