Delhi High Court
Sne India Pvt. Ltd. vs Commissioner Of Central Excise, ... on 23 February, 2015
Author: S.Ravindra Bhat
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on 23rd February, 2015
+ CEAC 105/2014 & C.M.No.19444/2014
SNE INDIA PVT. LTD. ..... Petitioner
Through: Mr.Rupesh Kumar and Mr.Hrihikesh,
Advs.
versus
COMMISSIONER OF CENTRAL EXCISE, DELHI-II
..... Respondent
Through: Mr.Satish Kumar, Sr.Standing
counsel.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.K.GAUBA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. Issue notice.
2. Mr.Satish Kumar, Standing counsel accepts notice on behalf of the
respondent.
3. With the consent of the learned counsel of the parties, the matter is
argued finally. The question of law urged on behalf of the
assessee/appellant is: "Whether the final order of CESTAT dismissing the
appeal for not complying with the directions to deposit ₹6 lakhs is correct
under the circumstances"?.
CEAC 105/2014
Page 1
4. The appellant was issued a Show Cause Notice (SCN) for violating
Rule 8(3A) of the Central Excise Rules, 2002 (hereinafter referred to as "the
Rule"). The Rule stipulates that if there is a delay in making the duty
payment beyond the prescribed 30 day time period, the assessee would be
treated as a defaulter and would have to pay for each consignment at the
time of removal.
5. The assessee had, instead of depositing the amount in cash or through
account PLA (under the Rules), sought to claim adjustment of amounts lying
to its credit in its CENVAT credit account. The SCN was replied by the
assessee stating/alleging that duty liability was in fact discharged eventually
by paying ₹7,52,903/-. The appellant approached the CESTAT. At the
stage of hearing of the stay application, there was a difference of opinion;
one member holding a view that interest of justice would be best sub served
if the appellant was directed to deposit ₹5000/- as a pre-condition whereas
the other view was that the appellant should be heard only on the payment of
₹13,39,225/-. The third member's view - on the stay application - was that
the sum of ₹ 6 lakhs was to be paid as the pre-deposit. The appellant could
not comply and consequently the appeal was dismissed in default.
6. The appellant urges that this Court should, in the circumstances of
the case, and follow the ruling of Gujarat High Court in Indsur Global Ltd.
vs. Union of India 2014 (310) ELT 833 (Guj.). It is argued that the view of
the High Court is that the default is of technical one and cannot result in
denial of the facility of credit altogether. Learned counsel for the Revenue,
on the other hand, submits that given the majority view on the stay
application and the final order, which was made in default, the appellant is
CEAC 105/2014
Page 2
obligated to pre-deposit the amount directed. He relied upon the decision of
Madras High Court in Unirols Airtex vs. Assistant Commissioner of Central
Excise, Coimbatore 2013 (296) ELT 449 (Mad.), and Gujrat High Court
Commissioner of Central Excise vs. Harish Silk Industries 2013 (288) ELT
74 (Guj.)
7. This Court has carefully considered the submissions. It is a matter of
record that the duty liability was discharged in the present instance along
with interest, though beyond the stipulated period of 30 days. In these
circumstances, the limited issue was whether the denial of credit facility
altogether was warranted. The CESTAT had no occasion given the
diversion of opinion of two of its members and the final opinion of the third
member, which varied with both the members to the extent that he directed
deposit of ₹6 lakhs, to consider the order on merits. In one sense, the order
of the third member by default becomes the order of the Tribunal on the
question of pre-deposit. Further, the appellant's contentions were never
considered on the merits after it complied with one member's order of
depositing Rs.5000/-.
8. We are of the opinion that interest of justice will be best served if the
appeal is restored to the file of the CESTAT and on the merits, the CESTAT
would, of course take into consideration the diverse views of the Madras and
Gujrat High Courts on the issue , and render its verdict on the merits of the
issue raised. All rights and contentions are expressively reserved. In these
circumstances, the assessee's appeal would be considered on its merits
provided it has complied and deposited ₹5,000/-.
9. The question of law is answered in favour of the appellant and against
the Revenue.
CEAC 105/2014
Page 3
10. The appeal and the pending application are disposed of in the above
terms.
S. RAVINDRA BHAT, J
R.K.GAUBA, J
FEBRUARY 23, 2015
mr
CEAC 105/2014
Page 4
