2013 (10) TMI 124 - HC - Customs

Restoration of appeal - Doctrine of merger - Held that - all efforts were made by the appellant to see that he does not comply with the order of predeposit and/or confirmed the duty liability. Even immediately on dismissal of the SLP by the Hon ble Supreme Court, the appellant did not deposit any amount and after a period of six years from the date of dismissal of the SLP, he deposited a sum of ₹ 6 lacs. Under the circumstances and in the aforesaid facts and circumstances of the case, the learned Tribunal has rightly dismissed the application submitted by the appellant for restoration of the appeal, which came to be dismissed as far as back in the year 2003. It appears that while dismissing the restoration application the learned Tribunal has relied upon the decision of the Delhi High Court in the case of Commissioner of Customs vs. M/s. Lindt Exports reported in 2011 (9) TMI 609 - DELHI HIGH COURT by which a view has been taken by the Delhi High Court that since the interim order of the CESTAT has merged with the High Court on appeal, the Tribunal becomes functus officio and cannot restore the appeal though predeposit was made later. Under the circumstances and in the facts and circumstances of the case, no error has been committed by the learned Tribunal in dismissing the restoration application and consequently not restoring the appeal to file - Decided against assessee.

Issues Involved:

1. Error in dismissing the application for restoration.
2. Error in following the judgment of the Delhi High Court.
3. Powers of CESTAT to restore an appeal dismissed for non-compliance.

Issue-wise Detailed Analysis:

1. Error in Dismissing the Application for Restoration:

The appellant challenged the dismissal of the application for restoration by CESTAT, citing non-compliance with the law laid down by the Gujarat High Court in the cases of Scan Computer Consultancy and Hussein Haji Harun. The appellant argued that the Tribunal should have restored the appeal after the appellant eventually deposited the predeposit amount of Rs.6 lacs, considering that the bank guarantee of Rs.2.5 lacs had already been encashed and goods worth Rs.20 lacs were seized, thus protecting the revenue's interest. The court, however, emphasized that the appellant had multiple opportunities to comply with the predeposit order but failed to do so timely. The Tribunal's decision to dismiss the restoration application was upheld, considering the appellant's prolonged non-compliance and the significant delay in depositing the required amount.

2. Error in Following the Judgment of the Delhi High Court:

The appellant contended that the Tribunal erred in dismissing the restoration application by following the Delhi High Court's judgment in Lindt Exports and Ors., which held that the Tribunal becomes functus officio and cannot restore the appeal after the interim order merges with the High Court's decision. The Gujarat High Court supported the Tribunal's reliance on this judgment, stating that once the interim order merges with the High Court's decision, the Tribunal loses the authority to restore the appeal. The court noted that the appellant's delayed compliance with the predeposit requirement further justified the Tribunal's decision.

3. Powers of CESTAT to Restore an Appeal Dismissed for Non-compliance:

The appellant argued that under the Customs Act, 1962, the Tribunal had the power to restore an appeal dismissed for non-compliance with an interim order. The court examined the appellant's reliance on previous judgments, including Hussein Haji Harun and Scan Computer Consultancy, where appeals were restored upon subsequent compliance with predeposit orders. However, the court distinguished these cases, noting that in those instances, the appellants complied with the predeposit orders immediately after dismissal, unlike the present case where the appellant delayed compliance by six years. The court asserted that there must be an end to litigation and upheld the Tribunal's decision to dismiss the restoration application due to the appellant's significant delay and non-compliance.

Conclusion:

The Gujarat High Court dismissed the appellant's tax appeal, emphasizing the appellant's repeated non-compliance with predeposit orders and the significant delay in depositing the required amount. The court upheld the Tribunal's reliance on the Delhi High Court's judgment and affirmed that the Tribunal had rightly dismissed the restoration application, thereby not restoring the appeal. The civil application for stay in the main tax appeal was also dismissed.

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