The appeal by the assessees arises from an order of the Central Excise & Service Tax Appellate Tribunal1. The assessees in support of the appeal have raised the following questions of law:
"1. Whether, in view of the fact that the appellants had never accepted the order of the Tribunal in respect of demand of pre-deposit of Rs.10 lacs and had agitated the matter upto the Hon'ble Supreme Court, the Tribunal ought to have restored the appeals and decided the same on merits upon deposit of Rs.10 lacs made by the appellants on 23.1.2013 after dismissal of the SLP on 3.1.2013.
2. Whether, in absence of merger of the order of the Tribunal upon the dismissal of the SLP in limine by the Supreme Court on 3.1.2013, the Tribunal could have refused to exercise its jurisdiction to restore the appeal upon pre-deposit of Rs.10 lacs.
3. Whether, at any rate, the order dated 8.4.2013 results in complete miscarriage of justice inasmuch as the appellants have been non-suited for reason of taking recourse to the legal remedy against the order of the Tribunal requiring it to make pre-deposit of Rs.10 lacs."
The appellants had filed appeals before the Tribunal against an order of adjudication confirming a demand for excise duty in the amount of Rs.60.88 lacs together with interest and penalty. The Tribunal was moved in an application for waiver of pre-deposit. On 14 November 2011, the appellants were directed to deposit an amount of Rs.10 lacs within a period of eight weeks. Subject to the said deposit, a stay was granted. The appeals were dismissed on 22 February 2012 for non-compliance of the order of pre-deposit. The appellants filed a substantive appeal before this Court against the order of the Tribunal on the application for waiver. The appeal was dismissed by a Division Bench of this Court on 26 July 2012. A special leave petition was also dismissed by the Supreme Court on 3 January 2013. After the dismissal of the special leave petition, the appellants filed a review application which was rejected by the Division Bench on 19 September 2014.
In the meantime, the appellants deposited the amount as required by the order of the Tribunal dated 14 November 2011 on 23 January 2013 and moved the Tribunal in a miscellaneous application for restoration of the appeals. The Tribunal held that the order which had been passed by it on the application for stay was the subject matter of an appeal before this Court and when the appeal stood dismissed and, the special leave petition also having been dismissed, the Tribunal would have no jurisdiction to allow restoration. In this regard reliance was placed on the judgment of the Delhi High Court in Commissioner of Customs v. Lindt Exports2, where it was held that once the order of the Tribunal had merged with the High Court's order and had attained finality, the Tribunal had no jurisdiction to entertain the application for restoration of the appeal.
Learned senior counsel appearing on behalf of the appellants has relied upon two decisions of the Gujarat High Court in Hussein Haji Harun v. Union of India3 and Priya Dyers v. Commissioner of Central Excise4.
The order of the Tribunal on the application for waiver of pre-deposit required the appellants to make a pre-deposit within a stipulated period. The appellants having failed to do so, the appeals were dismissed by the Tribunal. The appellants called the order of pre-deposit into question in an appeal before this Court. By the time, the appeal came up before the Division Bench for hearing on 26 July 2012, the Court was apprised of the fact that the appeals themselves before the Tribunal stood dismissed for non-compliance. The appellants did not apply for extension of time for pre-deposit either before this Court which dismissed the appeal on 26 July 2012 or before the Supreme Court when the special leave petition was dismissed on 3 January 2013.
Once an order has been passed by the High Court on an appeal filed against the order of the Tribunal on an application for waiver of pre-deposit, and the order of the Tribunal stood merged with the order passed by the High Court, the Tribunal could not thereafter have extended the time or granted restoration of the appeal. This view is consistent with the law laid down by the decision of the Delhi High Court in Commissioner of Customs v. Lindt Exports (supra), where it was held as follows:
"10. ... It is clear from the narration of facts that CESTAT had dismissed the appeals finally vide orders dated 26-3-2007 and the said order was upheld by this Court as the appeals of the respondents were dismissed on 9-10-2007. Doctrine of merger, therefore, shall clearly apply and once the order of the Tribunal had attained finality and had been merged in the order of this Court, the Tribunal had become functus officio and had no jurisdiction to entertain the applications preferred for restoration of appeals."
The judgment of the Gujarat High Court in Hussein Haji Harun (supra) involved a situation where an order of pre-deposit was passed by the Tribunal. The assessee could not make the deposit following which the appeal was dismissed by the Tribunal under Section 129-E of the Customs Act, 1962. No appeal was filed to the High Court against the order on the application for waiver of pre-deposit. Thereafter a miscellaneous application was filed before the Tribunal for the restoration of the appeal. The application was rejected by the Tribunal following which the matter was carried before the High Court. The Gujarat High Court held as follows:
"5. ... The mere absence of such a provision regarding the situation when an appeal comes to be dismissed for non-deposit of the penalty amount or duty demanded cannot be construed to mean that the Tribunal had no power to restore the appeal, which was dismissed for non-deposit of the penalty amount or duty demand. As observed by the Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors., 1987 (28) E.L.T. 185 (S.C.), when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred."
In the subsequent decision of the Gujarat High Court in Priya Dyers (supra), the Tribunal had passed an order of pre-deposit. The special civil application before the Gujarat High Court was withdrawn to enable the appellant to move a modification application before the Tribunal and when that attempt failed, the High Court was moved again. After the High Court dismissed the proceedings, the Supreme Court was moved in a special leave petition, which was withdrawn with liberty to move the Tribunal since a restoration application had already been filed. The Tribunal dismissed the application holding that it had become functus officio upon dismissal of the appeal by the High Court. The Gujarat High Court held that the consistent view has been that the right of appeal is sacrosanct and should not be taken away lightly and hence, though the requirement of pre-deposit was fulfilled though belatedly, in a substantive appeal, the Court was not without jurisdiction to allow such an application.
In our view, having considered both sets of judgments, we are inclined to follow the judgment of the Delhi High Court. The earlier view of the Gujarat High Court in Hussein Haji Harun (supra) involved a situation where the Tribunal had been moved with an application for restoration without (as in the present case) a substantive appeal having been filed before the High Court. Once a substantive appeal has been filed before the High Court against an order of the Tribunal on the application for waiver of pre-deposit, the order of the Tribunal, in such a case, would merge with the order of the High Court. No prayer was made before the High Court which dismissed the appeal for extension of time for pre-deposit or for restoration of the appeal. No such prayer was also made before the Supreme Court when the special leave petition was dismissed. In that view of the matter, the Tribunal was not in error in dismissing the miscellaneous application.
For these reasons, we hold that no substantial question of law would arise in the appeal. The appeal is, accordingly, dismissed. There shall be no order as to costs.
Order Date :- 12.11.2014 RKK/-
(P.K.S. Baghel, J) (Dr. D.Y. Chandrachud, CJ) Chief Justice's Court C.M. Delay Condonation Application No.364580 of 2014 In re:
Case :- CENTRAL EXCISE APPEAL DEFECTIVE No. - 124 of 2014 Appellant :- M/S Kisaan Gramodyog Sansthan And 2 Others Respondent :- Commissioner Of Central Excise Kanpur Counsel for Appellant :- Krishna Dev Vyas,S.D. Singh Counsel for Respondent :- Vinod Kant Srivastava Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice Hon'ble Pradeep Kumar Singh Baghel,J.
There is a delay of 361 days in filing the appeal against the order of the Central Excise & Service Tax Appellate Tribunal dated 8 April 2013.
The appellants had filed a review application on 22 May 2013, which is stated to have been rejected on 19 September 2014. The appellants have also relied upon a ground of medical illness.
In the interest of justice, we condone the delay.
The delay condonation application stands disposed of. There shall be no order as to costs.
Order Date :- 12.11.2014 RKK/-