By TIOL News Service

MUMBAI, MAR 13, 2015: ON the stay application filed by the appellant, the CESTAT passed a 66-page order and concluded by directing the appellant to make a pre-deposit of Rs.1 crore.

Since the said order was not complied, the appeal was dismissed and, therefore, the appellant is before the Bombay High Court.

After hearing both sides, the High Court inter alia observed -

++ In matters namely application seeking stay and waiver of the condition of pre-deposit, the Tribunal must apply its mind. The Tribunal must take into consideration relevant and germane tests particularly whether a prima facie and arguable case is made out and if there is any financial hardship and whether that aspect has been pleaded and sufficiently proved. Thus, the rights of the parties and their equities have to be balanced. This balance has to be struck by exercising the discretion judiciously and not arbitrarily and whimsically.

++ The Tribunal is not expected to pass virtually final order at such a stage. Very often, the Hon'ble Supreme Court has reminded subordinate Courts and Tribunals that they do not hold a mini trial at an interlocutory stage. That they are only required to find out a prima facie case and in whose favour the balance of convenience lies and who would suffer irreparable loss and injury.

++ The Tribunal is not expected only to dispose of interim applications, but take up Appeals and which are piled up for years together. The Tribunal has, on its daily Board not only such interlocutory applications, but equally the Appeals for final hearing. They are to be taken up seriatim.

++ Therefore, the Tribunal must ensure that it gets adequate time to take up the Appeals and for final disposal, so that the parties and lower authorities are guided not only in terms of interpretation and exposition of law by the Tribunal's final orders and for application to given facts and circumstances. That is equally the duty of the Tribunal as a last fact finding authority and while supervising the subordinate authorities.

++ We wonder if the Tribunal has passed such a lengthy order at the interlocutory stage, when it will get time for all this. In the present case, the Tribunal has referred to the conflicting views and opinions of different High Courts. It has also referred to several conflicting decisions and orders of its own and chose to analyse each of them and while deciding an interlocutory application. This is really uncalled for.

++ Undue importance and weightage cannot be given only to one document such as a certificate but all other materials such as statements under section 108 of the Customs Act. The over all and broad view has to be taken, therefore, it was not necessary to refer to all the statements and the role of a particular person in the alleged fraud and perpetrated on the public exchequer. It may be that a very serious case of fraud was brought before the Tribunal and in terms of the orders of the adjudicating authorities. However, the Tribunal has yet to decide as to whether there is a fraud, who is guilty and who can be punished for it. If it has to independently appraise and appreciate the factual material at the hearing of the Appeal, then, it should not be influenced by some findings and observations in the orders of the adjudicating authority. It was not a final hearing of the Appeal.

The appeal was allowed partly. The High Court directed the appellant to deposit a sum of Rs.30 lakhs and observed that if the same is deposited the Tribunal shall restore the Appeal to its file and decide it on its own merits and in accordance with law.

(See 2015-TIOL-597-HC-MUM-CUS)