2016 (6) TMI 17 - HC - Central Excise

Imposition of penalty - Section 112 of the Customs Act, 1962 - petitioners had a statutory alternative remedy of filing an appeal under Section 129(1) of the Act before the CEGAT, New Delhi and they availed it - Appeal dismissed for want of prosecution - Held that - the petitioners cannot be permitted to keep quiet for a long period of time and then make a complaint that as the records have been weeded out they cannot file an application for recall of the order and so the writ petition should be entertained. There is nothing on record to indicate that the petitioners had made any attempt to file any application. Also no good reason seen to accept the plea of petitioner that to protect the interest of the petitioners the Court may hear the petitioners after imposing costs. It is only when laches of 25 years had been satisfactorily explained by the petitioners that the Court could have considered imposing costs but the petitioners have miserably failed to satisfy the Court about the laches. - Decided against the petitioner

Issues:
Challenging imposition of penalties under Section 112 of the Customs Act, 1962
Delay in filing the petition challenging the Order-in-Original dated 28 October 1988
Justification for condoning the delay based on liquidation proceedings and communication from the Department
Contentions regarding pursuing statutory remedies and filing an application for recall of order
Explanations provided for not pursuing appeals and seeking to condone the delay
Judicial considerations on condoning delay and lack of satisfactory explanations for enormous laches

Detailed Analysis:

The petitioners, Director and Managing Director of M/s Dior International (P) Ltd., filed a petition challenging the Order-in-Original dated 28 October 1988 imposing penalties under Section 112 of the Customs Act, 1962. The petitioners had initially filed appeals against the order but these were dismissed for non-prosecution on 4 November 1997.

The petitioners sought to justify the delay in filing the petition by citing the liquidation proceedings of the companies, Dior and Kapri, and communications from the Department demanding penalty payments. The petitioners argued that the Department's actions prompted them to approach the Court in 2013, leading to the filing of the petition.

However, the respondent contended that the petitioners should have pursued the appeals before the Tribunal and could have filed an application for recall of the dismissal order. The respondent argued that once statutory remedies were availed, approaching the Court under Article 226 against the same order was impermissible.

The Court noted the substantial delay of about 25 years in filing the petition and found the explanations provided by the petitioners unsatisfactory. The Court emphasized the lack of diligence on the part of the petitioners in pursuing the appeals and seeking timely redressal.

Referring to relevant legal precedents, the Court highlighted the need for satisfactory explanations for condoning delays. The Court observed that the petitioners' inaction and negligence in pursuing the appeals did not warrant condonation of the significant laches displayed over the years.

The petitioners' argument that they were left remediless due to the weeding out of Tribunal records was dismissed by the Court, emphasizing the petitioners' responsibility to take timely action and not rely on such grounds for belated petitions.

Ultimately, the Court dismissed the petition, finding the petitioners' justifications for the delay inadequate and failing to demonstrate satisfactory reasons for the enormous laches observed in the case. The Court declined the request to impose costs, given the petitioners' failure to address the substantial delay effectively.

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