Baron International Ltd. vs Union Of India (Uoi)
2003 Latest Caselaw 1061 Bom

JUDGMENT

V.C. Daga, J.

1. Rule returnable forthwith. Mr. Lambey waives service on behalf of Respondents. Heard finally by consent of parties.

2. This petition is directed against the order dated 20th September, 2002 passed by the CEGAT, Mumbai refusing to accept modification of its earlier order dated 22nd April, 2002 directing deposit in the sum of Rs. 85 lakhs towards duty demanded from the Petitioner in the sum of Rs. 2.19 crores with penalty of Rs. one crore, finding that no prima facie case on merits warranting total waiver of duty pending consideration of the appeal has been made out by the Petitioner.

3. At this juncture, it must be mentioned that the original order of the CEGAT dated 22nd April, 2002 refusing to waive pre-deposit in toto and directing deposit of Rs. 85 lakhs is not a subject matter of challenge in this writ petition. Thus order dated 22nd April, 2002 has become final and conclusive between the parties. What is challenged in this petition is a subsequent order dated 20th September, 2002 refusing to grant application for modification of order dated 22nd September, 2002 and thereby refusing to dispense with the pre-deposit of Rs. 85 lakhs.

4. Let us now examine the legality of the impugned order dated 22nd April, 2002. It appears that the application seeking modification of the order is not filed with the petition for the reasons best known to the Petitioner. Thus for want of application on record it is not possible to find out what was the cause for seeking modification of the earlier order of the CEGAT dated 22nd April, 2002. There is no power with the CEGAT to review its order. The modification can only be asked in the event of change in circumstance. Now the question is what was the change in circumstance within three weeks. We cannot find any answer to this question for want of application depicting circumstances on record. No change in the circumstances are to be found in the petition.

5. Let us turn to the impugned order to find out an answer to this question, if possible. If one turns to Para 3 of the impugned order it does make a reference to the ground of modification. According to the said Para, financial hardship was the ground to seek modification of the order. This financial hardship sought to be made out cannot be said to be a change in circumstance after the order of the CEGAT dated 22nd April, 2002. The alleged financial hardship must have been in existence on the date of order dated 22nd April, 2002 or even prior thereto when the Miscellaneous Application seeking waiver of pre-deposit was moved or argued. If it was not taken into account or the Tribunal refused to accept it as a valid ground for want of evidence, then, could it be a matter for modification? Answer has to be in negative. In our view such a application was not tenable. At the threshold, Tribunal ought to have refused to entertain such application for want of prima facie case warranting modification of the earlier order, and ought to have rejected the same on this short ground.

6. While hearing some of the Writ Petitions challenging rejection of prayers for modification of orders directing pre-deposit, we noticed that it has become a routine practice on the part of the assessee/appellants to move application to seek modification of the order of the Tribunal directing pre-deposit. We have also noticed that such applications are freely entertain by the Tribunal ignoring the fact that it has no power to review its own order.

7. The CEGAT must bear in mind that it has no power to review its own order. No such power has been conferred on CEGAT by the legislature. In absence of such power, it cannot exercise review jurisdiction Patel Narshi Thakershi and Ors. v. Shri Pradyumansinghji Arjunsinghji ;

. Party before CEGAT can only seek modification of the order of the CEGAT. For seeking modification, a prima facie; case in that behalf is required to be made out in the pleadings. No application for review in the garb of prayer for modification can be entertained by the Tribunal.

8. Our experience shows that in almost all the applications moved to seek modification of the Tribunal's order contain only grounds of review. They are freely entertained by the CEGAT and the same are sometime accepted or rejected on merits with detailed order. Such exercise, apart from labour, must be consuming major part of its working hours. This wastage of labour and working hours can easily be saved by the CEGAT, if application moved in this behalf is prima facie, examined by CEGAT to find out whether any change, in circumstance after the previous order, is shown with sufficient material in that behalf; or any, other reason prima facie; exists warranting modification of the previous order on the ground which was hot available when the previous order was made the threshold, if such preliminary enquiry is made by the Tribunal, we are sure in most of the cases application may not be required to be heard on merits. Had such enquiry been made by the CEGAT in this behalf in this case, we are sure Tribunal would have saved its labour and time and would not have been required to devote nine pages for writing impugned order. We direct that henceforth the Tribunal shall first make prima facie; enquiry whether application needs consideration on merits as indicated by us hereinabove before considering any application for modification of its previous order on merits. If the Tribunal finds that prima facie case for modification is made out, then, only a Tribunal shall deal with such application on merits. The Tribunal shall be justified in rejecting frivolous applications at the threshold.

9. Turning to the impugned application for modification, we hold that the prayer for modification was unwarranted and ought to have been rejected by the tribunal at the threshold. We hold that no case for modification was made out warranting consideration on merits. The application in question was in substance meant for review of the earlier order dated 22nd April, 2002, the same was thus rightly rejected by the CEGAT.

10. So far as the merits of the contentions are concerned, they do not, need any consideration in view of our above findings. However, since Tribunal has dealt with the merits of the application and parties have addressed us in ex-tenso, we deem it fit to consider the same.

11. Shri Nankani, learned Counsel appearing for the Petitioners look us through the balance sheet for the years 2001-2002 to show dark side of the financial worth of the Petitioner-company and to demonstrate that the findings recorded by the Tribunal in this behalf are erroneous and perverse.

12. We were also taken through the certificate dated 23rd June, 2002 issued by M/s. V. Dhamania & Co. Chartered Accountant, Mumbai. The said certificate suffers from non-application of mind. The said certificate says "we are being informed that Company has been .........". This singular sentence is sufficient to demonstrate that the certificate was issued by the Chartered Accountant to oblige the Petitioner-company. It is based on hearsay evidence. No material facts or particulars as to who supplied information is to be found. No independent enquiry was made by the said Chartered Accountant before issuing such certificate. It is really, unfortunate, that such highly respected professionals like Chartered Accountants should start issuing such casual certificates just to please or oblige their clients. We have examined each and every aspect of the finding recorded by the Tribunal to examine the perversity of the findings sought to be demonstrated before us. Having examined the same, we are of the opinion that no perversity exists in the order. We agree with the findings of the Tribunal in toto.

13. If one turns to the P & L Account for the period ended 31st March, 2002, the sale of the Petitioner company are in the sum of Rs. 28,88,52,381/- for nine months. The net current assets are in the sum of Rs. 69,49,41,680/-. The net worth of the company is also positive. The sales of the Petitioner company for the year ended on 30th June, 2001 were in the sum of Rs. 513,47,28,469/- Schedule II forming part of the balance sheet as on 31st March, 2002 shows loans and advances to the Directors, Sister Companies or Group Companies, intercorporate deposits, intercorporate advances and other deposits are in the sum of Rs. 108,37,32,077/- as against 115,38,12,021/- as on 30th March, 2001 meaning thereby Rs. 17,00,79,944/- are realised in the current year in one or the other form. This is sufficient to show good financial health of the petitioner Company.

14. The above discussion will show that the order of the Tribunal cannot be said to be a perverse, much less erroneous. The view taken by the tribunal is not only possible but the correct view based on facts; which can very well be supported on the basis of the material available on record. No case is made out to interfere with the impugned order. We endorse and confirm the order of the CEGAT and dismiss this petition in limini for the reasons recorded herein as well as for the reasons recorded by the Tribunal in the impugned order.

15. In the result, petition is dismissed with no order as to costs.

16. Prothonotary and Sr. Master is directed to send copy of this order to the Chairman of the CEGAT for circulation to the members of the Tribunal for their information and action.