Delhi High Court
M/S Satvik Industries vs Commissioner Central Excise ... on 29 July, 2008
Author: Badar Durrez Ahmed
* THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on : 29.07.2008
+ CEAC No. 3 of 2008
M/S SATVIK INDUSTRIES ..... Appellant
-versus-
COMMISSIONER, CENTRAL
EXCISE, DELHI-II ..... Respondent
Advocates who appeared in this case:
For the Appellant : Ms. Reema Jain with Mr. Abhinav Jain
For the Respondent : Mr. Sanjay Katyal with Mr. R K Jha
CORAM :-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE RAJIV SHAKDHER
1. Whether the Reporters of local papers may
be allowed to see the judgment ?
2. To be referred to Reporters or not?
3. Whether the judgment should be reported
in the Digest ?
BADAR DURREZ AHMED, J (ORAL)
1. The present appeal has been filed by the appellant being
aggrieved by the order dated 31.01.2008 passed by the Customs,
Excise & Service Tax Appellate Tribunal (hereinafter referred as the
tribunal). The appellant, being aggrieved by the order-in-original
CEAC No. 3 of 2008 Page 1 of 5
passed by the Commissioner of Central Excise on 23.03.2007, had
preferred an appeal (Appeal No. E/2968/2007) in respect of the
penalty of Rs.1,06,01,497/- which had been imposed upon the
appellant by the Commissioner. It is relevant to note that no duty as
such was levied or a demand raised on the appellant by virtue of the
said order-in-original. Apart from the present appellant, there were
others also who had filed appeals in respect of the said order-in-
original, before the tribunal. The appellant had also filed an
application for waiver of pre-deposit. When the question of waiver
of pre-deposit was being heard by the Tribunal, the Tribunal came to
the conclusion that it would be a fit case to direct the Commissioner
to pass fresh orders after giving an opportunity of hearing to the
appellants including the petitioner on merits. This view had been
formed by the Tribunal because the Tribunal was convinced by the
arguments advanced by the appellant before it that no effective
hearing had been provided to them by the Commissioner before the
order-in-original had been passed. After coming to such a
conclusion the Tribunal set aside the order-in-original passed by the
Commissioner and disposed of all the appeals including that of the
appellant. However, while disposing of the appeals, the Tribunal
passed the following directions :-
CEAC No. 3 of 2008 Page 2 of 5
"........, we are of the view that in the facts and
circumstances of the case, M/s Satvik Industries
should pay a sum of Rs. 30.00 lacs towards penalty
imposed upon it as a condition of fresh hearing by the
Commissioner."
The Tribunal further directed :-
"Accordingly, we direct M/s Satvik Industries to
deposit a sum of Rs.30.00 lacs within six weeks from
today. On such deposit being made, the said appellant
will be given fresh opportunity of hearing and fresh
order on merit shall be passed by the Commissioner.
It is made clear that if the amount is not paid within
the aforesaid period, the appellant will forfeit the
right of fresh hearing and adjudication and in that
case the impugned order shall stand as regards the
said appellant. After the deposit is made as above, the
Commissioner shall pass order within four months."
2. The appellant is aggrieved by the aforesaid directions of
the Tribunal whereby the appellant is required to make a deposit of
Rs. 30.00 lacs for a hearing to be granted by the Commissioner. The
learned counsel for the appellant submitted that the provisions of
Section 35F of the Central Excise Act, 1944 pertains to deposit for
the purpose of hearing the appeal. In the present case, according to
the learned counsel for appellant, there was no appeal pending
before the Tribunal and therefore, no order directing deposit of Rs.
30.00 lacs towards penalty could have been passed by the Tribunal
as a condition for hearing the appellant in the original proceedings.
CEAC No. 3 of 2008 Page 3 of 5
He also submitted that before a direction with regard to the deposit
could be made under the said provision, there must be some duty or
penalty levied. Since the Tribunal had set aside the order-in-original,
there was no duty or penalty levied against the appellant and, as
such, the question of making a deposit of Rs. 30.00 lacs did not at all
arise.
3. We have considered the submissions made by learned
counsel for parties and are of the view that once the Tribunal had set
aside and quashed the order-in-original on the ground of denial of
natural justice, the Tribunal ought not to have imposed the condition
of deposit of Rs. 30.00 lacs. This is so because, first of all, the order
by which the penalty was imposed on the appellant itself stood set
aside and there was no penalty leviable against the appellant after
the setting aside of the said order-in-original. Apart from this, we
cannot lose sight of the fact that the reason for setting aside of the
order-in-original was that the petitioner had been denied an
opportunity of hearing. In such circumstances, the Tribunal, in our
view, ought not have to have imposed a condition for deposit of
Rs.30.00 lacs which is clearly harsh and burdensome particularly,
when what the appellant is seeking is an opportunity of hearing. The
CEAC No. 3 of 2008 Page 4 of 5
impugned order is set aside to the extent that the appellant was
required to make a deposit of Rs. 30.00 lacs. The remand order
survives and the Commissioner shall hear the appellant as directed
by the Tribunal, but without requiring the appellant to deposit a sum
of Rs.30.00 lacs.
+CM no. 8365/2008 in CEAC No. 3 of 2008
*
In view of above directions passed in the appeal, this
application is disposed of as having become infructuous.
BADAR DURREZ AHMED, J
RAJIV SHAKDHER, J
July 29, 2008
mk
