Aafloat Textiles India Limited ... vs The Commissioner Central Excise ...
2017 Latest Caselaw 7827 Bom

                                                   20-CEXA-42-2016.DOC




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       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
            ORDINARY ORIGINAL CIVIL JURISDICTION


            CENTRAL EXCISE APPEAL NO. 42 OF 2016



 1. Aafloat Textiles India Ltd
 formerly known as Akai Impex Ltd., a
 company registered under the Companies
 Act, 1956, having its registered office at
 Ostwal Oranate, Shop No.130, 1st Floor,
 B-Wing, Building No.2, Jesal Park,
 Bhayander (E), Thane, Maharashtra and a
 factory, inter alia at S.No. 1/1/2, Village
 Chinchpada Pati-Vasona Cross, Silvassa -
 396 230, D & NH (UT)                                    ...Appellant

         Versus

 1. The Commissioner of Central Excise
 Vapi,
 Having his office at 4th Floor, Adarshdham
 Building, Opp. Town Police Station, Vapi.          ...Respondent


 Mr. Prakash Shah, with Mr. Jas Sanghvi, i/b PDS Legal for
       Appellant.
 Mr. A.S. Rao for Respondent.

                               CORAM:   A.S. OKA &
                                        RIYAZ I. CHAGLA, JJ.

JUDGMENT RESERVED ON 11TH SEPTEMBER 2017

JUDGMENT PRONOUNCED ON 5th OCTOBER 2017

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O R A L J U D G M E N T :- (Per Riyaz I. Chagla J.)

1. The Appellant by the present Appeal is challenging

order dated 21st October 2014 passed by the Customs,

Excise and Service Tax Appellate Tribunal, West Zonal Bench

at Ahmedabad (for short "Appellate Tribunal").

2. The Appellants are a company registered under the

Companies Act, 1956 and engaged, inter alia in the

manufacturing of mainly Partially Oriented Yarn ("POY"). The

Appellants had made a referred application to the Board of

Industrial and Financial Reconstruction ("B.I.F.R."). Pursuant

to the application, BIFR by order dated 4th September 2003

declared the Appellants as a sick industrial company in terms

of Section 3 (1) (o) of the Sick Industrial Companies (Special

Provisions) Act, 1985. The factory of the Appellants has been

closed since 2004. The Appellants were investigated on

account of their not having paid National Calamity Contingent

Duty ("NCCD") leviable on Polyester Filament Yarn and

summons were issued by the Directorate General of Central

Excise Intelligence, Vapi on 7th May 2004. The Appellants

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forward their response to the summons. By show cause

notice dated 29th July 2004, Appellants were called upon to

show cause as to why the NCCD should not be recovered

and penalty imposed upon them as well as penalty imposed

upon the General Manager of the Appellants under the

provisions of the Finance Act. It appears that the Appellants

did not receive notice of the hearing fixed pursuant to the

show cause notice as the factory had been closed in 2004.

The Additional Commissioner, Central Customs, Vapi by

Order-in-Original dated 21st July 2005 confirmed the

demands of NCCD and imposed penalty upon Appellant as

well as General Manager of the Appellant under the

provisions of the Finance Act. The Appellants filed an Appeal

against the said order-in-original dated 21st July 2005 along

with application of the stay before the Commissioner

(Appeals) Central Excise, Customs, Vapi. The notices for

hearing were never received and therefore, the Appellants

could not attend the personal hearing. The Commissioner

(Appeals), Central Excise and Customs, Vapi, by an Order-in-

Appeal dated 10th March 2006 dismissed the Appeal as well

as the stay application filed by the Appellants by upholding

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the order-in-original passed by the Additional Commissioner.

The Appellant filed Appeal against the Order-in-Appeal dated

10th March 2006 passed by the Commissioner (Appeals),

Central Excise & Customs, Vapi along with the stay and

waiver of deposit application before the Appellate Tribunal.

The Appellate Tribunal by exparte order dated 12th January

2007 dismissed the stay application filed by the Appellants

and granted liberty to the Appellants to deposit amount of

NCCD and penalties payable under the order impugned

before it within eight weeks. In the meanwhile, the BIFR

recommended winding up of the Appellants company on 15th

November 2006. An order of winding up was passed by the

BIFR on 31st January 2007. The Appellants could not

deposit the amount directed to be deposited by the Appellant

Tribunal. By an order dated 14th March 2007, the Appeal filed

by the Appellants was dismissed for non-compliance of the

pre deposit order dated 12th January 2007. The Appellants

filed an application for restoration of the Appeal / Stay

application praying for restoration holding that the Appellants

had made out a case for restoration of the Appeal. The

Restoration Application was dismissed on the ground that the

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Appellant had not made a case for restoration of the Appeal.

The Appellants have challenged the impugned order in the

present appeal.

3. Mr. Prakash Shah, learned counsel appearing for the

Appellants has submitted that the Appellate Tribunal has not

taken into consideration the reason for the non compliance of

the pre-deposit order dated 12th January 2007. Mr. Shah

submitted that the order dated 12th January 2007 had been

passed exparte and that the Appellants had not received

notice of the hearing before the Appellate Tribunal. The

impugned order dated 14th March 2007 dismissing the

Appeal was again passed exparte as the Appellants had not

received notice of the hearing since the factory had been

closed since 2004. Mr. Shah submitted that the Appellants

had been declared a Sick Industrial Company by the order of

the BIFR and that they had been closed since 2004 and

hence were unable to comply with he order of pre-deposit

passed by the Appellate Tribunal and had accordingly applied

for waiver of the pre-deposit amount together with restoration

of the Appeal which had been dismissed exparte. The BIFR

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had also ordered winding up of the Appellants and assets of

the Appellants were taken over by the ARCIL on 6th February

2008. It was accordingly submitted by Mr. Shah that in this

situation, the Appellants were unable to pay pre-deposit

amount as ordered.

4. Mr. Rao learned counsel appearing for the Respondent

has supported the impugned order of the Appellate Tribunal.

5. We have carefully considered the arguments. We are

of the view that the Appellants have not made any effort to

attend the hearings before the Appellate Tribunal and / or

place the recommendation of the BIFR for winding up of the

Appellants Company on 15th November 2006 before the

Appellate Tribunal when the stay application came up for

hearing on 12th January 2007.

6. Paragraph 6 of the impugned order reads thus:-

"As regards the reliance placed by the ld. Counsel on the proceedings before BIFR, we find that the BIFR authorities, though recommended for winding up of the company

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on 15th November 2006, the said letter / notice was not produced before the Tribunal when the stay matter came up for disposal on 12th January 2007. We also notice that winding up order of Hon'ble High Court was recalled by their Lordships only in May 2014. Nothing prevented the Appellant from appearing before the Tribunal when the matter was listed for stay and subsequently for compliance on 14th March 2007 and bring to notice of the Bench the factual matrix.

7. The Appellate Tribunal has held that the Appellants had

not bothered to comply with the orders passed by the

Appellate Tribunal. It appears that the Appellants were only

interested in prolonging the proceedings as also noticed by

the Appellate Tribunal and the Appellate Tribunal had given

ample opportunities to the Appellants for complying with their

prior orders. The Appeal had been dismissed in March 2007

but the Appellants chose to file the Application for restoration

of Appeal only in April 2013 i.e. over six years later and the

Appellants have not been able to justify the delay in

preferring the restoration application. It is not open for the

Appellants to contend that they were not aware of the

dismissal of their Appeal for non-compliance. We concur with

the view taken by the Appellate Tribunal.

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8. We accordingly find no merit in the Appeal preferred by

the Appellants and accordingly dismiss the present Appeal.

There shall be no order as to costs.

       (RIYAZ I. CHAGLA J.)                ( A.S. OKA, J.)