Customs, Excise and Gold Tribunal - Mumbai
Ispat Industries Ltd. vs Commissioner Of Central Excise on 8 December, 2004
Equivalent citations: 2005(182)ELT109(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. We have heard Shri Vipin Jain, Ld C.A. for the applicant and Shri Bijoy Kumar, the Ld SDR for the respondent.
2. Out of the three applications which are listed to day, one is for early-hearing of the appeal and the other two are Miscellaneous applications which seek directions for the refund claim disputed amounts of duty, penalty and interest which have been recovered by the department by adjusting against rebate claims sanctioned to the applicant on export of its goods.
3. Applicant has stated that this Tribunal had, vide Order No. C1/2089/WZB/2003 dated 15.9.2003, waived the condition of pre deposit of penalty of Rs. 66,00,257/- and Rs. 1,00,000/- imposed by the Commissioner of Central Excise, Raigad, and had also ordered stay against recovery thereof. After expiry of 180 days from the date of stay order, applicant filed an application for early hearing of the said appeal and/or for extension of the stay order, which application was listed for hearing on 8.11.2004. It is further stated that after hearing both sides on the 8.11.2004, an order extending stay for a further period of six months was dictated and pronounced in the open Court.
4. In the other miscellaneous application, it is stated that this Tribunal had, vide stay order No. CB/582/WZB/2004 dated 16.3.2004 waived the condition of pre deposit of the entire amount of duty of Rs. 20,12,814/-, penalty of equivalent amount imposed by the Commissioner of Central Excise, Raigad, and ordered stay against recovery thereof. After the expiry of 180 days from the date of the stay order, applicant filed a fresh stay application. On 22.9.2004 applicant also filed an application seeking early hearing of the appeal and/or seeking extension of stay granted vide order dated 15.3.2004. It is stated that the stay application was listed for hearing on 11.11.2004 However, since no Bench was available on that day, the matter was adjourned and re-fixed for hearing on 7.12.2004.
5. On November 30, 2004, the Deputy Commissioner of Central Excise, Raigad, vide an order No. 18 (DN KPL)133/04 dated 30.11.2004 sanctioned certain rebate claims filed by the applicant. After such sanction, he adjusted the amounts in the other matters which were stayed vide the orders mentioned above. The reason given was that the stay granted by the Tribunal had expired at the end of 18 days, and since no order granting extension was produced before him, he could, in terms of Section 11 of the Central Excise Act, 1944 adjust those amounts against Rebate claims sanctioned by him.
6. Applicant has raised the following contentions before us:
a) that in terms of Rule 41 of the CESTAT (Procedure) Rules, 1982, the Tribunal has powers to make such orders or give such directions as may be necessary or expedient to prevent abuse of its process or to secure ends of justice. Applicant has placed reliance on the decisions of the Madhya Pradesh High Court in the case of Anjali Cooler Pvt Ltd v. UOI 1997 (94) ELT 40, wherein the High Court has by relying upon the decision of the Madhya Pradesh High Court in the case of Gajra Bevel Gears Ltd v. UOI and that, Allahabad High Court in the case of Arvi Components Pvt Ltd v. UOI 1997 (90) ELT 299, held that resort to coercive measures for recovery of disputed amounts, while a stay application is pending before an appellate authority is a gross abuse of the process of law.
b) That the Tribunal in the case of Reliance Industries Ltd v. CC (Imports) 1999 (84) ECR 1998 (T) interpreted the scope of Rule 412 in the following manner:
"The rule empowers the Tribunal to make appropriate orders to prevent abuse of its process. What is the process of the Tribunal? The process of commences from the time the appeal is filed and is received by the concerned officer in terms of Rule 6 of the aforesaid rules. The process continues till the appeal is finally disposed of. In fact even the final disposal of the appeal does not result in the end of the process. It would extend to subsequent proceedings also like reference applications and applications for rectification of mistake. In the present case the appeal was filed and was received on 22.3.1999, when the process of the Tribunal commenced. In terms of Section 129E of the Act, the present applicants have approached the Tribunal for waiver of the condition of pre deposit of the confirmed sum. If before the Tribunal hears this application and issues appropriate orders thereupon, any agency seeks to unilaterally enforce the demand, then such action would amount to abusing the Tribunal's process.
(emphasis supplied)."
c) That Madras High Court in the case of Collector of Customs, Madras v. Madras Electro Castings Pvt Ltd 1994 (71) ELT 646, held in the context of Rule 41 of CESTAT (Procedure) Rules 1982 held that the expression:
"secure the ends of justice" in Rule 41, wide enough to clothe the Tribunal with powers to pass such interim orders, as it may deem fit in the facts and circumstances of the case. In addition to this, the power of Appellate Tribunal to confirm, modify or annula the decision or order appealed against also takes in its fold to pass such interm orders as are necessary in order to aid the main relief sought for in the appeal. To put it in other words, the interim relief is granted to preserve in status quo the rights of the parties (see Kihoto Hollohan). In Madan Copal's case, it has been pointed out that the interim orders are passed in aid of the main relief. Therefore, it is quite inherent in the appellate power and more so in the case of CEGAT to pass such interm orders as are necessary for the purpose of ensuring that the main relief sought in the appeal is available to the party at the end of the proceeding. The fact that Section 129E only provides for relieving the appellant from the undue hardship that would be caused to him in depositing the duty and interest as demanded or penalty as levied, does not in any way take away the inherent power of the Appellate Tribunal to pass such interm orders as are necessary. This is only re-stated in Rule 41 of the CESTAT (Procedure) Rules, 1982."
(emphasis supplied)."
d) That the Bombay High Court in the case of Mahindra & Mahindra v. UOI 1992 (59) ELT 505, held that where certain amounts had been wrongfully recovered by the department during the pendency of the assessee's stay application, the department was bound to return the amounts so recovered. This order has been followed by the Tribunal in the cases of (i) Mohan Engg Works v. CC, Meerut 1994 (73) ELT 161 (T) and (ii) Seagram Manufacturing Ltd v. CC, New Delhi 2002 (146) ELT 414(Tri-Del).
7. When the matter was called out, the Ld D.R. Mr Bijoy Kumar, requested for pass over of the matter so as to obtain instructions from the Commissioner of Central Excise, Raigad. The Ld D.R. later on informed us that he has contacted and spoken to the Commissioner, who has stated --'Since the appellant could not produce orders regarding the stay extension by the Tribunal, the Deputy Commissioner appropriated the amount against the pending rebate amount. He further stated that the amount has already been adjusted in the Government account, no further coercive action is needed."
8. We have considered the submissions made by both sides and agree with the contentions of applicant that the action recovering disputed amount during the pendency of applications for extension of stay is the facts of this case are clearly an abuse of Tribunal's process. The effect of such an action is to render the stay application/application for extension infructuous and orders passed therein.
(i) We find that the Deputy Commissioner has been overzealous and hasty in his acts and his Commissioner, who has to supervise the acts of the Deputy Commissioner is not inclined to exercise his authority to over rule the appropriation orders and effect the refunds. The response of the Commissioner of total helplessness exhibits a lack of desire on his part to effectively supervise the subordinate or and abetment by negligence or lack of control on the subordinates from passing incorrect orders of administrative matters. The Commissioner is the respondent in the stay applications and is represented by the D.R. If the Commissioner is not privy to the order passed and pronounced in the open Court, he has himself to blame for failure of bis control on and reporting machinery. For having failed in effective supervision and break down of reporting the machineiy and not keeping the same in proper working order, the buck of blame has to stop at the desk of the Commissioner.
ii) The response of the Commissioner, as ascertained by the Bench and filed by the S.D.R., is exhibiting total callous attitude to the problem. The order of appropriation is an executive order and an accounting exercise of ministerial nature, the Commissioner is meant to take initiative and correct such ministerial and administrative in discretion by his subordinates. His silence by no such submission/assurance, induces us to conclude that the Commissioner is reluctant, at the least, to invoke his supervisory powers & jurisdiction & pursue the duty to redress the wrongs errors of his subordinates in discharge of their executive/administrative functions, leaving no option to the Bench to step in and exercise the mandate under Rule 40 of the CESTAT (Procedure) Rules to 'take over and exercise control over the departmental authority in relation to the matter of effecting the stay ordered on recovery by this Tribunal.
8. We agree with Mr Jain's submission that Rule 41 of CESTAT (Procedure) Rules, T982 would clearly cover a case, of the present type, where the department takes impermissible and undue advantage of the inherent and unavoidable time gap that exists between the date when an application for extension of stay is filed and the time when the order for extension is ultimately received by both the parties. It is a fact well known, even to the department, that there is a backlog of appeals, stay applications and other applications before this Tribunal and it does take some time before an application for stay or extension of time gets listed. Even after an application is listed, it may get adjourned for any number of reasons, many a times despite the applicant's and other concerned keenness to expedite the matter. It so happened in this case, i.e. in Appeal No E/299/04 Mum, when on 11.11.2004 the Bench itself was not sitting, therefore the matter was adjourned and relisted on 7.12.2004. The fact that the matter had been adjourned was known to the representative of the department and it is therefore not open to the Commissioner and others in the department to claim ignorance of such fact. The position insofar as the Appeal No. E/17 77/03 Mum is concerned, an order granting extension of stay on recovery was, in fact dictated, and pronounced in the open Court on 8.11.2004. Contra to the same, the recovery has been made by appropriation. We also find that this order was despatched by the Registrar on 22.11.2004. If, in the meanwhile, the department exploits the situation. as they indeed have, by taking action for recovering the disputed amounts, rendering the entire application and the proceedings and the standing of the CESTAT infructuous. Such an action therefore would certainly be an abuse of this Tribunal's process. Undoing, such wrongs with a view to prevent abuse of its process are an inherent process of this Tribunal. If such a view is not possible, then CESTAT would become a mute spectator to patently high handed, unjust, illegal and unconstitutional action on the part of the Respondents. It is settled law that a petitioner in appeal or otherwise cannot suffer, because of the absence of an action on the part of the Court (Rajkumar Dey and Ors. v. Parapada Dey 1987 (4) SCC 398). This principle was applied bay the Larger Bench of this Tribunal in the case of IPCL v. CCE 2004 (63) RLT 1 while dealing with the question whether the Tribunal had powers to grant extension of stay.
10 Since nothing contrary has been shown, in. view of the above, we direct the Commissioner to return to the applicant the entire amount, which has been appropriated against sanctioned rebate claims without the authority of law and in abuse of the powers. We find this case to be a fit case to exercise the supervisory/inherent powers of this Tribunal on the officers to secure ends of justice.
11. The Revenue has contention that this Tribunal has no powers to undo the wrong committed by the department are to be rejected. As we have observed above, Rule 40 & Rule 41 of the CESTAT (Procedure) Rules, 1982 has been interpreted as conferring wide powers on the Tribunal to pass such orders and giving such directions as it may deem fit to prevent abuse of its process and also to secure ends of justice.
12. (a) In the light of the same, we allow the two miscellaneous applications filed under Rule 41 of the CESTAT (Procedure) Rules, 1982 and direct the department to return the amounts appropriated within seven days from the date of the receipt of this order.
(b) This third application which seeks early hearing of appeal No. E299/04 Mum is however dismissed.
(c) A copy of this order be endorsed to the Chief Commissioner In Charge the Respondent Commissioner charge who may consider this conduct on part of the Commissioner while evaluating his Annual Confidential Report/work performance.
12. Application disposed of accordingly.