Madras High Court
M/S.Picasso Overseas vs The Customs on 4 March, 2016
Author: V.Ramasubramanian
Bench: V.Ramasubramanian
In the High Court of Judicature at Madras Dated : 04.3.2016 Coram :
The Honourable Mr.Justice V.RAMASUBRAMANIAN and The Honourable Mr.Justice N.KIRUBAKARAN Civil Miscellaneous Appeal No.151 of 2016 and CMP.No.1258 of 2016 M/s.Picasso Overseas, Mumbai-7. ...Appellant Vs
1.The Customs, Excise and Service Tax Appellate Tribunal, Shastri Bhavan, Chennai-6.
2.The Commissioner of Customs (Appeals), Customs House, Chennai-1.
3.The Assistant Commissioner of Customs (Gr.5B), Customs House, Chennai-1. ...Respondents APPEAL under Section 130A of the Customs Act Act, 1962 against the order dated 2.7.2015 made in Final Order No.40732 of 2015 on the file of the first respondent herein.
For Appellant : Mr.S.Murugappan Judgment was delivered by V.RAMASUBRAMANIAN,J This appeal is filed, under Section 130A of the Customs Act, 1962, by the assessee, challenging the dismissal of their appeal by the Tribunal for their failure to comply with an order to make a pre-deposit.
2. Heard Mr.S.Murugappan, learned counsel for the appellant.
3. By an Order in Original dated 13.5.2004, the Assistant Commissioner of Customs imposed upon the appellant the differential anti dumping duty of Rs.2,73,31,320/- holding that the goods imported under certain bills of entry are compact fluorescent lamps with choke. As against the said order, the assessee filed a first appeal before the Commissioner (Appeals). The appeal was dismissed, forcing the appellant to file a further appeal. On the application for waiver of pre-deposit condition, the Tribunal directed the appellant to make a pre-deposit of the entire anti dumping duty.
4. As against the said order, the appellant filed a writ petition. By an order dated 12.11.2009 passed in W.P.No.23063 of 2009, a learned Judge of this Court modified the pre-deposit order and reduced the amount to be paid to Rs.75 lakhs, which is almost 1/3rd of what the Tribunal had ordered.
5. The said order of the learned Judge was taken on appeal to the Division Bench and the Division Bench originally granted a stay on 12.1.2010 in W.A.No.30 of 2010 directing the Tribunal not to dismiss the appeal until further orders. The said writ appeal was subsequently dismissed by a judgment dated 31.7.2013 by the Division Bench. The relevant portions of the judgment of the Division Bench read as follows :
"17. Considering the question of pre-deposit or otherwise, only the prima facie case and balance of convenience is to be considered. The appellant is not only required to plead undue hardship, but also to establish the same before the Tribunal. The order of the Tribunal refers to the financial hardship pleaded by the appellants in the course of hearing on the basis of balance sheet of 2001-02. The Tribunal has recorded factual findings that the said hardship pleaded by the appellants on the basis of balance sheet for 2001-02 is not sufficient. Only considering the financial difficulties expressed by the appellant, the learned Single Judge directed the appellant to deposit Rs.75 lakhs. The appellant has not produced any further material to establish undue hardship. We do not find any reason warranting interference of the order of the learned Single Judge.
18. In the result, the writ appeal is dismissed confirming the order dated 12.11.2009 passed by the learned Single Judge in W.P.No.23063 of 2009."
6. Thereafter, the Revenue filed an application before the Tribunal for early hearing of the main appeal. On 2.7.2015, when the application was taken up, the learned counsel for the appellant reported no instructions, but confirmed the failure to comply with the conditional order. Therefore, the Tribunal dismissed the main appeal by an order dated 2.7.2015. It is against the said order that the assessee has come up with the above appeal.
7. The above narration of facts would show that the original conditional order passed by the Tribunal was on 7.9.2009. It stood modified by an order of the learned Judge of this Court in a writ petition, passed on 12.11.2009. That order of the learned Single Judge was confirmed by the Division Bench on 31.7.2013.
8. Without any effort on the part of the appellant, the appeal somehow survived before the Tribunal without getting formally dismissed as a consequence of non compliance with the conditional order. Thereafter, nearly after two years, the appeal surfaced at the instance of the Revenue, when an application for early hearing was filed. Even when the application for early hearing was moved, it was not the case of the appellant that they wanted more time to pay or that the law has changed or that there are other circumstances in their favour. All that the learned counsel for the assessee did was to report no instructions after the judgment of the Division Bench dated 31.7.2013.
9. Despite the above facts, which stare at one's face, it is sought to be contended by the learned counsel for the appellant that by a subsequent decision rendered by the Supreme Court, the law is now settled in favour of the assessee. Since what was done by the Supreme Court was actually a declaration of law, it is deemed to be the law at all points of time. Hence, his contention is that the Order in Original and the order in appeal are non est in the eye of law. In such circumstances, it is the further contention of the learned counsel for the appellant that the Tribunal could not have dismissed the main appeal despite the non compliance with the conditional order.
10. In support of the above contentions, the learned counsel for the appellant relies upon certain decisions.
11. In Assistant Commissioner Vs. Saurashtra Kutch Stock Exchange [(2008) 230 ELT 385 (SC)], on which, reliance is placed by the learned counsel for the appellant, the Supreme Court was concerned with a case where an assessee filed an application for rectification under Section 254(2) of the Act, after the declaration of law in favour of the assessee. It was in such circumstances that the Supreme Court held that once a law is declared by the Supreme Court, it shall be deemed to be the law that was always in force and that therefore, when an application for rectification is filed, the concerned Authority was obliged to correct the error. The Supreme Court held that the assessment made on the basis of wrong appreciation of law, after the law is declared by the Supreme Court, could always be corrected as an error apparent on the face of the record.
12. But, in the case on hand, the order impugned in the appeal is an order consequential to the failure of the appellant to comply with the conditional order. The contention of the learned counsel for the appellant that the issue was kept alive by the appellant, hardly merits any acceptance. Without any effort on the part of the appellant, the appeal was in cold storage from 31.7.2013 with the appeal not surfacing for hearing. The order of the Tribunal dated 7.9.2009, as modified by the order of the learned Single Judge of this Court dated 12.11.2009 and as confirmed by the judgment of the Division Bench dated 31.7.2013 have all attained finality. Therefore, a case where an application for rectification was filed after the change of law, when the proceedings were still pending, cannot be treated on par with cases of this nature.
13. The next decision relied upon by the learned counsel for the appellant is that of a Division Bench of this Court in V-Guard Industries Ltd. Vs. CTO [(2003) 158 ELT 806]. That was also a case where the assessee filed an application for rectification. Therefore, the Division Bench of this Court took the view that it did in that case.
14. In the decision of the Bombay High Court in Walchand Nagar Industries Vs. Gaitonde ITO [(1962) 44 ITR 260], there was a possibility for the mistake being rectified under Section 35 of the Act in question. Therefore, that is also a case, which is not comparable to the one on hand.
15. The next contention of the learned counsel for the appellant is that even in cases where there is a failure on the part of the assessee to comply with the conditional order, it is not open to the Tribunal to mechanically dismiss the appeal for non compliance. In support of this contention, the learned counsel for the appellant relied upon two decisions, one of the Karnataka High Court and another of the Calcutta High Court.
16. In M.I.Metal Sections P.Ltd. Vs. Collector of Central Excise, Bangalore [(1995) 75 ELT 470], the Karnataka High Court pointed out that if an assessee fails to comply with the conditional order, the Tribunal should list the appeal for hearing. On that date, it would be open to the assessee to raise a plea that due to financial difficulties or other circumstances beyond its control, it could not comply with the order. Once such a plea is raised, the Tribunal can always consider the same and pass an order on merits either accepting or rejecting.
17. In the next decision in CCE Vs. Shree Govinddeo Glass Works Ltd. [(2011) 263 ELT 178], the Calcutta High Court went one more step than the Karnataka High Court and held in paragraph 29 of its decision that it was open to the Tribunal on the date fixed for the hearing of the appeal even to modify its earlier order or annul the same. Paragraph 29 of the decision of the Calcutta High Court reads as follows :
"In view of the aforesaid discussion as stated above, we think that the proper course and procedure of the Tribunal would be wherever pre-deposit is required either the same should be dispensed with fully or partially on application being made. If such dispensation is not allowed, then the Tribunal would issue a show cause before taking up the appeal for dismissal on account of failure of pre-deposit. On the date fixed, if cause is shown, the Tribunal will consider the same and if sufficient cause is to be found, then Tribunal can exercise all discretion and may extend the period or may reconsider the question of dispensation of pre-deposit on subsequent event or fresh materials having been placed after earlier order having been passed."
18. But, with great respect, we do not think that it is possible for the Tribunal to tinker with its earlier order either without an application for modification or without an application for extension of time. Many times, conditional orders are passed as self working orders. It does not mean that a conditional order, passed not as a self working order, will always remain alive to be tinkered with at any point of time, say for instance even nearly after two years. In this case, even assuming that the ratio laid down by the Calcutta High Court is correct, the Tribunal could not have done anything in the light of the fact that the conditional order of the Tribunal passed originally in 2009 got modified by an order of the learned Judge of this Court and it was confirmed by the Division Bench. Therefore, even if the law laid down by the Calcutta High Court is accepted by the Tribunal to reflect the correct position in law, the Tribunal could not have modified the order passed by this Court.
19. Once a conditional order passed by the Tribunal attains a finality, the same cannot be annulled after a consequential order is passed. The conditional order was neither challenged by way of an appeal nor an application for extension of time or for modification was ever filed.
20. The contention that no finality attaches to an interim order, cannot be accepted. In so far as the application for stay and the conditional order are concerned, it attains finality unless modified by a subsequent order on an application for extension or for modification. We are not talking about finality to the original order of assessment or original order of demand. We are talking about the finality attached to the condition imposed. Therefore, we are of the considered view that the appeal does not merit acceptance.
21. Accordingly, the civil miscellaneous appeal is dismissed. Consequently, the above CMP is also dismissed.
04.3.2016 Internet : Yes To
1.The Customs, Excise and Service Tax Appellate Tribunal, Shastri Bhavan, Chennai-6.
2.The Commissioner of Customs (Appeals), Customs House, Chennai-1.
3.The Assistant Commissioner of Customs (Gr.5B), Customs House, Chennai-1. .
RS V.RAMASUBRAMANIAN,J AND N.KIRUBAKARAN,J RS CMA.No.151 of 2016& CMP.No.1258 of 2016 04.3.2016