2024 (9) TMI 1263 - HC - Customs

Restoration of appeal allowed after the respondent (appellant therein) has complied with the condition of pre-deposit - HELD THAT - The company was declared as a sick company under the SICA, and therefore its account could not have been operated upon. The earlier order passed by this Court did not take into account the said aspects. It is also found that the delay in filing application for restoration of an appeal after 07 years by the company was maintainable before the Tribunal as the company was earlier sick and restored only later. It also did not take into account that the appeals of the Directors could not have been dismissed on the ground of non-compliance of section 35F of the Act as appeal of Harbhajan Singh was to be heard on merits as pre-deposit had been exempted, and the appeal of Vinod Garg could not have been dismissed as the pre-deposit amount had already been deposited. Be that as it may, even after the pre-deposit was made, the appeal of Vinod Garg was not taken up and would be treated to be pending. Since the appeal of respondent-Royal Industries Ltd. has been dismissed on the ground of non-payment which they have made now and also the same as having been accepted by the appellant, the Revenue cannot be allowed to turn around and challenge the restoration. The order passed by the CESTAT, Chandigarh dated 03.01.2022, whereby it restored the original appeal for hearing on merits after condition under section 35F of the Act was complied with, does not warrant any interference of this Court, and the same is upheld. Appeal dismissed with direction to the appellate authority to decide the appeal on merits.

Summary

Issues:
Appeal under section 130 of the Customs Act, 1962 against the restoration of appeal after compliance with pre-deposit condition; Dismissal of appeals due to delay and non-compliance of pre-deposit; Restoration of appeal based on interim order; Jurisdiction of the Tribunal post-2014; Consideration of sick company status under SICA; Delay in filing application for restoration of appeal; Dismissal of Directors' appeals based on pre-deposit non-compliance; Challenge to restoration of appeal by the Revenue.

Analysis:
The appeal was filed under section 130 of the Customs Act, 1962 against the Customs, Excise and Service Tax Appellate Tribunal's (CESTAT) decision to restore the appeal after the respondent complied with the pre-deposit condition. The Tribunal had directed the respondent to make specific deposits towards demands, penalties, and conditions for hearing their appeals, which were not fully met initially. The company was declared sick under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) by the Board of Industrial and Financial Reconstruction (BIFR) in 2005, affecting its ability to comply with the pre-deposit requirements.

The High Court dismissed the appeal filed by the company on the grounds of delay and non-compliance. However, the respondent later made the required deposit and applied for restoration of the appeal, citing relevant legal precedents. The Tribunal, considering the deposit made and legal precedents, condoned the delay in filing for restoration. The Revenue opposed the restoration, citing judgments in similar cases, but the Court noted the unique circumstances of the case, including the sick company status and the partial compliance by the directors.

The Court rejected the argument that the Tribunal was functus officio after 2014, emphasizing that an appeal dismissed for lack of pre-deposit remains dormant until the deposit is made. The Court found that the earlier dismissal did not consider the company's sick status and the directors' compliance. It held that the restoration of the appeal by the Tribunal was justified, considering all aspects and legal precedents cited. The Court upheld the Tribunal's decision to restore the appeal and dismissed the Commissioner of Customs' appeal, directing the appellate authority to decide the appeal on merits.

In conclusion, the Court upheld the Tribunal's decision to restore the appeal, considering the company's sick status, directors' compliance, and legal precedents. The dismissal of the Commissioner's appeal was upheld, and pending applications were dismissed, with no costs awarded.