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ASHWANI KUMAR JAIN versus CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL & ANOTHER

High Court of Judicature at Allahabad

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Ashwani Kumar Jain v. Customs, Excise & Service Tax Appellate Tribunal & Another - CENTRAL EXCISE APPEAL No. 150 of 2006 [2007] RD-AH 11010 (3 July 2007)

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HIGH COURT OF JUDICATURE OF ALLAHABAD

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD

APPELLATE JURISICTION

CUSTOMS APPEAL NO. 150 OF 2006

Ashwani Kumar Jain Appellant

Vs.

Customs Excise and Service Tax Appellate Tribunal and another

Respondents.

WITH

CUSTOMS APPEAL NO. 74 OF 2006

Agemo Exim Ltd. Appellant

Vs.

Customs Excise and Service Tax Appellate Tribunal and another

Respondents.

AND

CUSTOMS APPEAL NO. 75 OF 2006

Sejai International Ltd. Appellant

Vs.

Customs Excise and Service Tax Appellate Tribunal and another

Respondents.

Mr. Pramod Kumar Jain for the Appellant

Dr. A.K.Nigam assisted by Mr. S.K.Misra for the respondents.

CORAM: Hon'ble H.L.Gokhale, C.J.

Hon'ble R.K.Agrawal,J.

DATE July 3, 2007

P.C.:

1. Heard Mr. Pramod Kumar Jain, appearing the appellant and Dr. A.K.Nigam assisted by Mr. S.K.Misra leaned counsel appearing for the respondents.

2. The appellants, in all the three appeals, have challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, dated 16th January, 2006, whereby the applications filed by the three appellants seeking to deposit a sum of Rs. 50 lac only towards pre-deposit for entertaining the appeals instead of Rs. 2.65 crores as directed by the Tribunal earlier in its order dated 20th June, 2006 had been dismissed.

3. It is material to note that the appellants had filed three writ petitions earlier challenging the order dated 20th June, 2001 passed by the Tribunal by which the appellants were directed to deposit a part of the amount of duty and penalty towards the amount required as pre-deposit for entertaining the appeals which were then considered by the learned Single Judge of this Court. The common order dated 5th October, 2000 passed by the Commissioner Customs & Central Excise, Meerut II was under challenge before the Tribunal. The Tribunal had directed the first appellant- Ashwani Kumar Jain to pre-deposit an amount of rupees one crore, M/s Agemo Leather Components (P) Ltd. were directed to pre-deposit an amount of Rs. 75 lakhs and Rs. 20 lakhs and M/s Sukumar Chemicals (P) Ltd. were directed to predeposit an amount of Rs. 50 lakhs and Rs. 20 lakhs towards penalty. When the learned Single Judge was about to reject the three petitions, an affidavit was filed on behalf of the petitioners and, in paragraph 4, thereof, it was stated that the petitioners were facing financial crisis. It may be mentioned here that the Tribunal vide order dated 3rd September, 2001 had dismissed the appeals for non deposit of the amount in terms of the earlier order dated 20th June, 2001. However, in order to purchase peace a direction was sought to be issued for hearing the appeals by the Tribunal, which should be on, pre-deposit of Rs. 50 lakhs and three months time was sought for depositing the amount and till that time recovery proceedings were sought to be stayed. The learned Single Judge, however, had accepted the offer of the petitioners and granted an opportunity to apply before the Tribunal for consideration to deposit the amount and for consideration of the entire matter by the Tribunal. When the matter went before the Tribunal, it was seen that the appellants did not deposit the amount as required and, therefore, the Tribunal dismissed the applications by its order dated 12th September, 2005. Feeling aggrieved the appellants once again approached this Court by filing Writ Petition No. 1515 of 2005. A Division Bench of this Court was of the view that the Tribunal had not given adequate reasons in the order in dismissing the applications and, therefore, it had set aside the Tribunal's order vide order dated 9th November, 2005 with the direction to the Tribunal to decide the applications made by the appellants de novo. The matter was accordingly heard by the Tribunal and by its impugned order dated 16th January, 2006 it refused to accept the applications to revive the proceedings made without making any pre-deposit. The order is a detailed order.

4. Mr. Pramod Kumar Jain, learned counsel for the appellants submitted that the appellants had a good case on merit. If the appellants had any such merit, as claimed the writ petition should have been decided in that way but the learned Single Judge dismissed the writ petition earlier and on that occasion in order to buy peace as stated by the appellants in their affidavits it had directed the Tribunal to consider the offer of depositing Rs. 50 lakhs on the ground that the appellants were facing financial crisis. When the matter went to Tribunal it was realized that they had no financial difficulty and the Tribunal refused to accept the offer. The only error in the Tribunal's order was that adequate reasons were not given and, therefore, the High Court sent back the matter before the Tribunal.

5. We have perused the order of the Tribunal. It is clear that, from the balance sheets of the three appellants it was found that undisputed assets of more than Rs. 4.3 crores are available for all the three applicants together. That has been explained in paragraph 13 of the order of the Tribunal. At the same time the Tribunal has also observed in paragraph 17 that from the pleadings of the appellants it appears that the assets of the appellants are systematically getting eroded by passage of time. Considering all that factors the Tribunal had declined to entertain the appeals preferred without making any pre-deposits and had insisted, in our view rightly, that the appellants should have deposited the entire amount as directed earlier. We do not find any reason to interfere with the order of Tribunal. It is a well-reasoned order.

6. All the three appeals stand dismissed.

3.7.07

samz

(R.K.Agrawal) Chief Justice

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