2012 (11) TMI 886 - SC - Central Excise

Failure to make pre-deposit - dismissal of appeal - held that - the appellant was duty bound to deposit the amount of excise duty determined by CESTAT within a period of three months from the 25.04.2011, if it was interested in pursuing the present appeals. Since the appellant has failed to do so, the inevitably result of such failure is the dismissal of these appeals. - Decided against the assessee.

Summary

Issues involved:
Failure to deposit excise duty as directed by CESTAT leading to dismissal of appeals.

Analysis:
The Supreme Court had directed the appellant to pay the entire amount determined by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) within three months. While the penalty amount was deposited, the principal amount of Rs.3.85 crores remained unpaid. The respondents argued that as per the court's order, the appeals should be deemed dismissed due to non-payment. However, the appellant disputed this, claiming that CESTAT had not determined the excise duty liability, only imposing a penalty which was already paid.

Upon reviewing CESTAT's order, it was found that the tribunal had concluded that the appellant had gained at the cost of Revenue by controlling the Maximum Retail Price (MRP) and realizing proceeds above the declared price. CESTAT invoked the doctrine of lifting the corporate veil to ascertain the true nature of the company's actions, emphasizing that the courts intervene when the corporate structure is used to evade obligations towards Revenue. The court noted that the appellant was obligated to deposit the excise duty amount determined by CESTAT within three months to pursue the appeals. As the appellant failed to comply, the court dismissed the appeals due to non-payment of the excise duty amount.

In conclusion, the Supreme Court upheld the dismissal of the appeals based on the appellant's failure to deposit the excise duty amount determined by CESTAT within the specified timeframe. The court emphasized the importance of fulfilling financial obligations as directed by the tribunal to continue pursuing legal remedies. The judgment highlights the consequences of non-compliance with payment directives in legal proceedings, leading to the dismissal of appeals in this case.