By TIOL News Service

MUMBAI, MAR 28, 2018: THE CESTAT had passed the following order dated March 2016 -

"When this matter was called out, none appeared on behalf of the appellant nor there is any communication informing about the outcome of appeal filed by them before the Hon'ble High Court, against our stay order. The pre-deposit is not complied with, hence we dismiss the appeal for non compliance."

The appellant/petitioner is before the Bombay High Court and their only submission is that such manner of disposal of the Appeal is impermissible, given the language of Section 129E of the Customs Act, 1962.

The counsel for the Revenue submitted that a SCN dated 06.12.2012 was served raising specific demands against the appellant/petitioner and an order-in-original came to be passed on 25.03.2014 confirming the duty demand. That the appellant had filed an appeal before the CESTAT and the Bench had passed an order dated 18.11.2014 directing the appellant to make pre-deposit of the entire duty demand of Rs.1,00,55,335/- for obtaining stay from recovery of the balance dues. [See - 2014-TIOL-2545-CESTAT-MUM]. The appellant had, thereafter, filed an application for modification of the stay order but the CESTAT rejected the same by an order dated 10.03.2015 - 2015-TIOL-870-CESTAT-MUM. Nonetheless, two weeks more time was given to comply with the pre-deposit order and report compliance. And since nothing was heard from the appellant, the impugned order came to be passed by the Bench dismissing the appeal for non-compliance. It is further submitted that the appellant is blowing hot and cold; that when the initial order of the stay application has not been challenged, the appellant cannot take advantage of an order passed by the High Court in the appeal of some other assessee; that the present appeal be dismissed.

After hearing both sides and perusing the order under challenge, the High Court opined that the appeal raised the following substantial question of law -

(i) Whether in the facts and circumstances of the case, the Appellate Tribunal was justified in dismissing the Appeal No.C/87446/14-Mum filed by the Appellant without examining the merits under Section 129E of the Act in view of the Order dated 16.11.2015 of this Hon'ble High Court granting unconditional waiver of the requirement of pre-deposit in case of other importers and thereby, quashing and setting aside the Order No.S/1193-1194/14/CSTB/CI dated 20.10.2014 of the Appellate Tribunal to make pre-deposit?"

Adverting to sections 129B and 129E of the Customs Act, 1962, the High Court noted that the Supreme Court had dealt with somewhat identical controversy and in the context of a power conferred on the same Appellate Tribunal under the Scheme of Central Excise Act, 1944, in the case of Balaji Steel Re-rolling Mills - 2014-TIOL-92-SC-CX-LB .

After extracting from the apex court decision (supra), the High Court observed –

"The Hon'ble Supreme Court concluded that the Tribunal could not have dismissed the Appeal for want of prosecution or without adjudication on merits, but, ought to have decided it on merits, given the plain language of the statute. That language does not permit it to dismiss an Appeal for want of prosecution or for want of presence of assessee and its representative. That would also apply to the cases of the present nature. It is that aspect of the matter which impressed us. In identical touchstone, we do not think that the Tribunal's order can be upheld. It is not in accordance with law. It is vitiated by a serious error of law apparent on the face of record."

The impugned orders were quashed and set aside and the Tribunal was directed to adjudicate the appeal on merits as expeditiously as possible.

The appeal was allowed. The Writ Petition was disposed of as not pressed. No order as to costs.

(See 2018-TIOL-529-HC-MUM-CUS)