Rajinder Kumar Mittal vs Commissioner Of Central ...
2014 Latest Caselaw 6366 Del

$~1 to 3.
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+       CENTRAL EXCISE ACT CASE NO. 102/2014

                                             Date of decision: 2nd December, 2014
        RAJINDER KUMAR MITTAL                                      ..... Petitioner
                                  Through Mr. C. Hari Shankar, Sr. Advocate with
                                  Mr. Harsh Gopalia, Advocate.

                                  versus

        COMMISSIONER OF CENTRAL EXCISE,DEIHI-I
                                                                  ..... Respondent

Through Mr. Rahul Kaushik & Ms. Bhuvneshwari Pathak, Advocates.

CENTRAL EXCISE ACT CASE NO. 103/2014 M/S PARVEEN TOBACCO CO PVT LTD. ..... Petitioner Through Mr. C. Hari Shankar, Sr. Advocate with Mr. Harsh Gopalia, Advocate.

versus

COMMISSIONER OF CENTRAL EXCISE, DELHI-I, ..... Respondent Through Mr. Rahul Kaushik & Ms. Bhuvneshwari Pathak, Advocates.

CENTRAL EXCISE ACT CASE NO. 104/2014 PARVEEN KUMAR ..... Petitioner Through Mr. C. Hari Shankar, Sr. Advocate with Mr. Harsh Gopalia, Advocate.

versus

COMMISSIONER OF CENTRAL EXCISE,DEIHI-I ..... Respondent

Through Mr. Rahul Kaushik & Ms. Bhuvneshwari Pathak, Advocates.

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE V. KAMESWAR RAO

SANJIV KHANNA, J. (ORAL):

This appeal impugns the order passed by the Customs, Excise and

Service Tax Appellate Tribunal, Principal Bench, Delhi (Tribunal, for

short) dated 26th August, 2014 disposing of the applications for waiver of

pre-deposit filed by M/s Parveen Tobacco Co. Pvt. Ltd., and its directors,

Rajinder Kumar Mittal and Parveen Kumar. No specific direction for the

pre-deposit has been made in the case of the directors, but they would

possibly suffer adverse consequences in case of failure by the company,

M/s Parveen Tobacco Co. Pvt. Ltd., to make the pre-deposit of 50% of the

duty liability.

2. Having heard counsel for the parties, we are inclined to frame the

following substantial question of law:-

"Whether the Customs, Excise and Service Tax Appellate Tribunal was correct in disposing of the applications for waiver of pre-deposit in terms of the directions issued in other cases without elucidating and referring to the facts and contentions raised by the applicants?"

3. As a short issue arises for consideration, with the consent of the

parties, we are taking up the appeals for hearing today itself.

4. The subject matter of challenge in the appeals preferred by the

appellants herein, before the Tribunal is the order-in-original passed by the

Commissioner dated 28th February, 2013. The order-in-original confirms

demand of duty of Rs.1,44,55,063/-, imposes penalty of an identical

amount, and directs payment of interest. Assertions in the order-in-original

are serious and relate to removal of chewing/spit tobacco without payment

of excise duty. It refers to the search and seizure operations conducted by

the officers of the Directorate General of Central Excise Intelligence, the

evidence/material collected and the inferences drawn. The two individual

appellants, namely, Rajinder Kumar Mittal and Parveen Kumar have been

directed to pay penalty of Rs.5 lacs each.

5. The impugned order passed by the Tribunal, in the first paragraph

records the factum that the appeal has been preferred against the findings

of the Commissioner. Further, the impugned order confirms duty of

Rs.1.44 crores and that penalty of Rs.5 lacs each stands imposed on the two

directors, Rajinder Kumar Mittal and Parveen Kumar. The second

paragraph refers to the factum that penalty stands imposed on the dealers

involved in the alleged clandestine removal. The Tribunal in the order

dated 10th December, 2013 had disposed of their applications for waiver of

the pre-deposit, with the direction to the dealers to pay 50% of the penalty

imposed on them.

6. The third paragraph of the impugned order records and narrates the

reasoning. For the sake of completeness, we are reproducing the same:-

"3. Inasmuch as the dealers against whom the allegation and findings for dealing with clandestinely removed goods of M/s. Praveen Tobacco Co. Pvt. Ltd. have already been directed to deposit 50% of the penalties imposed upon them, we are of the view that no different decisions can be adopted in the present case also. Accordingly, by following the earlier order of the Tribunal passed in the referred case and penalties imposed upon the dealers arising out of same impugned order, we direct M/s. Praveen Tobacco Co. Pvt. Ltd. to deposit 50% of the duty confirmed against them within a period of 12 weeks from today, subject to which pre- deposit of balance amount of duty, interest and entire amount of penalties imposed upon all appellants shall stand waived and its recovery stayed during the pendency of the appeals."

7. There is merit in the contention of the appellants that the aforesaid

reasoning does not deal with or even refer to the contentions. The

appellants have stated that the order-in-original was passed in haste and

hurry, besides the demand created is exorbitant and excessive. It is

submitted that minimal or meagre penalties, viz. ranging between

Rs.20,000/- to Rs.1,00,000/- were imposed on the dealers, whereas in the

present case the excise duty demanded is Rs.1.44 crores. The Tribunal

followed their order in the case of dealers without noticing the difference in

the quantum of demand. Financial position and/or hardship of the appellant

company has not been taken into consideration. As far as individual

directors are concerned, they have not been asked to deposit any amount

but they would suffer consequences in the form of dismissal of appeal in

case payment is not made by M/s Parveen Tobacco Co. Pvt. Ltd.

8. Learned counsel for the Revenue accepts that the third paragraph of

the impugned order does not elucidate or give reasons but submits that the

whole issue can be examined by this Court in the present appeals.

9. We are not inclined to accept the submission made by the learned

counsel for the Revenue as it would not be correct and proper to examine

the factual matrix and issues in these appeals while answering the

substantial question of law. We have noticed that the allegations against the

appellant are quite serious. However, they should be given an opportunity

to meet the findings and their contentions noticed before a prima facie view

is formed. We are not stating that the appellant should not have been asked

to deposit 50% of the tax amount but before any direction or finding is

recorded, the pleas raised by the appellants have to be examined and

considered.

10. In Ravi Gupta versus Commissioner of Sales Tax, Delhi and

Another, (2009) 5 SCC 208 (SC) it has been held that three things have to

be considered by the Tribunal while dealing with the applications for

waiver of pre-deposit and they are: (i) prima facie case; (ii) balance of

convenience; and, (iii) irreparable loss. The principles in this regard have

been set out in Siliguri Municipality versus Amalendu Das, AIR 1984 SC

653 and other cases. In Ravi Gupta (supra) it has been observed:-

"8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand

raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a licence to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizen's faith in the impartiality of public administration, interim relief can be given."

11. In these circumstances, we answer the question of law in favour of

the appellants, but pass an order of remit directing the Tribunal to decide

the applications for waiver of pre-deposit afresh. We also record that we

have not examined the issue and question of pre-deposit on merits and it

will be open to the Tribunal to increase, decrease or maintain the direction

for 50% of the pre-deposit and/or direct the individual directors to make

the pre-deposit.

12. To cut short delay, parties are directed to appear before the Tribunal

on 12th January, 2015, when a date of hearing will be fixed.

The appeals are accordingly disposed of. No costs.

SANJIV KHANNA, J.

V. KAMESWAR RAO, J.

DECEMBER 02, 2014 /VKR