Gujarat High Court
Vishnu Dyeing And Printing Mills (P) ... vs Union Of India (Uoi) on 18 October, 2004
Equivalent citations: 2005(184)ELT246(GUJ)
ORDER B.J. Shethna, J.
1. The petitioner No. 1-Vishnu Dyeing & Printing Mills (P) Ltd. is engaged in the business of dyeing and printing works. The petitioner No. 2 is the Director of the petitioner No. 1 Company. On 24-4-1998 the Assistant Commissioner along with Superintendent (Technical), Central Excise, Division-II, Surat-I and the Inspector visited premises of petitioner No. 1 at 6.00 p.m. and carried out search in presence of the panchas noticing that certain processed fabrics were found in excess of the recorded stock and accordingly they were seized by the authorities. Search of the premises of the petitioner yielded such kacha delivery challans and four pocket diaries, which were seized from behind Mr. Bagdawala working with petitioner No. 1 company as the Asst. Dyeing Master, who admitted recovery of note books recovered under the panchnama and made a statement that the clearance of the processed fabric was without payment of duty.
2. After completing the investigation show cause notice was issued under Rule 233-A of the Central Excise Rules, 1944 on 14-10-1998 (Annexure-B) by the Commissioner, Central Excise and the Customs, Surat-I to which the reply was also filed by the petitioners. After hearing the parties, the Commissioner passed order-in-original dated 31-8-1999 (Annexure-C) and confirmed total dues of Rs. 3,54,72,896.55 and also imposed penalty of the same amount of Rs. 3,54,72,896.55 on petitioner No. 1 company and also imposed penalty of Rs. 20 lakhs on the petitioner No. 2-Director of the petitioner No. 1 company and penalty of Rs. 20,000/- on Mr. Bagdawala, Asst. Dyeing Master, as stated in para 3.2 of this petition. The aforesaid order passed by the Commissioner was challenged in appeal Nos. 4328 to 4330 of 1999 before the CEGAT along with stay application Nos. 3242 to 3244 of 1999. All the three stay applications were disposed of by the CEGAT by its impugned common order dated 9-5-2001 (Annexure-D) after hearing both the parties at length and after considering the relevant documents on record. Considering all the aspects of the case, the CEGAT directed the assessee company to deposit Rs. 25 lakhs by 31-5-2001 as a pre-condition to hearing of the appeal and on the deposit being made the order of waiver of pre-deposit of remaining amount of Rs. 3,29,72,896.55 as well as penalty amount of Rs. 20 lakhs imposed on the company and also waived the pre-deposit of penalties imposed on other applicants and for compliance it was ordered to be posted in first week of June, 2001.
3. On almost last day i.e. on 30-5-2001 the petitioner No. 1 company filed Modification Application No. 417 of 2001 before the CEGAT for modification of the order of pre-deposit of Rs. 25 lakhs passed by the CEGAT dated 9-5-2001 (Annexure-D) on the ground of its poor financial condition. It appears from the impugned order dated 24-7-2001 passed by the CEGAT on the said modification application that though the petitioners were required to deposit Rs. 25 lakhs by 31-5-2001 as per its previous order dated 9-5-2001. (Annexure-D), but on the last date of the month i.e. on 30-5-2001 modification application was filed by them on the ground of continued losses and very poor liquidity condition, which was already considered by it on earlier occasion, therefore, it was not inclined to entertain that application. However, on the statement made by the learned counsel appearing for the petitioners before the CEGAT that the applicant will furnish bank guarantee of Rs. 25 lakhs within two weeks, therefore, though it was inclined to dismiss not only the modification application but also the appeal for non-compliance of the pre-deposit order, it had accepted the modification application, modified its earlier order dated 9-1-2001 (Annexure-D) but directing the petitioners to furnish bank guarantee latest by 31-1-2001 valid till completion of the appeal proceedings and for two months thereafter and the matter was ordered to be posted for compliance on 31-7-2001 on modification application is at "Annexure-E".
4. It appears from the averments made in Para 3.5 of this petition that even the subsequent order dated 24-7-2001 (Annexure-E) passed by the CEGAT of furnishing bank guarantee latest by 31-7-2001 was not complied with by the petitioner No. 1 company and once again 10 days time was prayed for from the CEGAT for furnishing bank guarantee of Rs. 25 lakhs. It appears from the impugned order dated 17-8-2001 (Annexure-F) passed by the CEGAT that the said request of the petitioner No. 1 company was rejected and consequence thereof the appeal of the petitioner was also dismissed as the Director of the petitioner No. l company failed to offer any satisfactory explanation for not furnishing bank guarantee as ordered earlier by the CEGAT and misleading his counsel on the previous occasion for furnishing bank guarantee within two weeks. The CEGAT has also observed in its impugned order that the amount ordered to be deposited by the Tribunal was hardly 3% of the duty and penalty demanded and that the company had at least four months time (from the date of the order till disposal of the stay application) to take steps to furnish bank guarantee, but the same was not furnished.
5. On earlier occasion the petitioner approached this Court by way of Special Civil Application No. 12681 of 2001 wherein at the first instance notice was ordered to be issued by the Division Bench of this Court on 3-3-2003 making it returnable on 17-3-2003 for verifying the bona fides of the petition company in furnishing the bank guarantee. But having failed to furnish the bank guarantee within stipulated period of two weeks, same Division Bench by its order dated 17-3-2003 dismissed the said petition on the ground that there was absolutely no valid reason for it to interfere with the impugned order "Annexure-F" passed by the Tribunal, which was passed in lawful exercise of its jurisdiction. The orders passed by the Division Bench of this Court (Coram : R.K. Abichandani & D.H. Waghela, JJ.) are as under -
"Order dated: 3-3-2003 Notice returnable on 17th March, 2003. In the meantime, the petitioner will furnish bank guarantee in the sum of Rs. 25.00 lacs before the Tribunal as per the order of the Tribunal. Direct Service permitted.
Order dated: 17-3-2003 There is absolutely no valid reason to interfere with the impugned order of the Tribunal which has been validly passed in lawful exercise of its jurisdiction. The petitioner has not been able to furnish bank guarantee in the sum of Rs. 25 lakhs pursuant to our order dated 3-3-2003, which made to verify the bona fides of the petitioner. Notice is, therefore, discharged with no order as to costs."
6. Under the circumstances, without going into any other question, this second petition was required to be dismissed as not maintainable. However, Ms. Kapadia, learned counsel for the petitioners vehemently submitted that due to poor financial condition of the petitioner-company it was not able to furnish the bank guarantee and as soon as it acquired sufficient funds it has furnished bank guarantee dated 3-4-2004 (Annexure-H ) and thereafter, moved the CEGAT by way of Restoration application No. 899 of 2003 in Appeal No. 4330 of 1999 for restoration of their appeal, which was dismissed by the Tribunal by its impugned order dated 17-8-2001 (Annexure-F) on account of not furnishing the bank guarantee as ordered earlier, but it was wrongly rejected by an impugned order dated 1-9-2004 (Annexure-A). Ms. Kapadia, learned Counsel for the petitioners submitted that the CEGAT ought to have granted their restoration application and restored their appeal on file on their furnishing bank guarantee. She submitted that due to their poor and weak financial condition initially they were not able to furnish the bank guarantee and as soon as they had sufficient funds then immediately they furnished the bank guarantee dated 3-4-2004 which should have been accepted by the CEGAT and, their restoration application should have been granted and their appeal should have been restored to the file for deciding the same on merits. She submitted that the CEGAT was more prejudiced with the petitioners because on earlier occasion they had approached this court against its impugned order dated 17-8-2001 (Annexure-F) by way of writ petition. Therefore, though the petitioners had furnished bank guarantee in April, 2004, it had refused to restore their appeal, which was dismissed by it for non-compliance of pre-deposit order of furnishing. She, therefore, submitted that this court should exercise its writ jurisdiction in favour of the petitioners and quash and set aside the impugned order at Annexure-A passed by the Tribunal on 1-9-2004 and direct the CEGAT to hear and decide their appeal on merits by restoring the same on file. She also submitted that there is a fresh cause of action accrued in favour of the petitioners with the dismissal of restoration application by the CEGAT by its impugned order dated 1-9-2004 (Annexure-A) and, therefore, this Court should not dismiss her petition on the ground that their earlier petition was dismissed by the Division Bench of this Court on 17-3-2003.
7. We are unable to accept the aforesaid submission of Ms. Kapadia for the petitioner. The CEGAT passed the impugned order dated 17-8-2001 (Annexure-F) dismissing the appeal on the ground of non-compliance of pre-deposit order. Writ petition filed against the said order before this Court was dismissed by the Division Bench of this court way back of 17-3-2003 for non-furnishing bank guarantee. Therefore, the impugned order at "Annexure-F" passed by the CEGAT merged into the order of this Court passed on 17-3-2003 in earlier writ petition i.e. Special Civil Application No. 12681 of 2002. Once the impugned order at "Annexure-F" passed by the CEGAT has merged into the order passed by this court in writ petition, then it was not open to .... petitioner No. 1 company to furnish bank guarantee dated 3-4-2004 on its own and then apply before the CEGAT by way of the restoration application for restoration of their appeal, which was already dismissed for non-compliance of the pre-deposit order.
It may be stated that for the first time i.e. on 9-5-2001 the CEGAT had granted time to deposit Rs. 25 lakhs by end of May, 2001 and waived the remaining duty of more than Rs. 3 crores and penalty of the same amount. Thereafter, the modification application was allowed on 24-7-2001 on the assurance given by the learned counsel for the petitioners that they will furnish bank guarantee of Rs. 25 lakhs within two weeks. But the assurance was breached and further 10 days time was asked for, which was not granted by the CEGAT and that modification application and the main appeal were dismissed by an order dated 17-8-2001 (Annexure-F). Thereafter, after lapse of considerable time they approached this court in 2002 by way of writ petition and though two weeks time was granted to furnish the bank guarantee by the Division Bench of this court on 3-3-2003, the same was not furnished by them within the period of two weeks and because of that their petition was dismissed on 17-3-2003 (Annexure-G). Thereafter, on its own the petitioner-company had furnished the bank guarantee dated 3-4-2004 after the lapse of period of more than one year of the dismissal of their earlier petition and then applied before the CEGAT for restoration of their appeal by way of restoration application, which was not permissible order the law, therefore, the CEGAT was absolutely justified in dismissing the restoration application by its impugned order dated 1-9-2004 (Aneexure-A).
We also do not find any force in the submission of Ms. Kapadia that because of the filing of earlier writ petition before this court against its impugned order a Annexure-F, the CEGAT was prejudiced and therefore, it had dismissed the restoration application. In the impugned order at Annexure-A the CEGAT has only taken note of the fact of the dismissal of their previous writ petition by the High Court on the ground of non-furnishing of the bank guarantee. In our considered opinion the CEGAT was right in considering inordinate delay of 3 years on the part of the petitioners in furnishing the bank guarantee.
8. It may be stated that though the petition is labelled as petition under Article 226 of the Constitution of India, strictly speaking, it is a petition under Article 227 of the Constitution of India. Scope of which is very narrow and limited. Hon'ble Supreme Court in case of Mohd. Yunus v. Mohd. Mustaquim reported in AIR 1984 SC 38 has held that "A mere wrong decision without anything more is not enough to attract the jurisdiction of the High Court under Article 227. The supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is limited "to seeing that an inferior Court or Tribunal functions within the limits of its authority" and not to correct an error apparent on the face of the record, much less an error of law. In exercising the supervisory power under Article 227, the High Court does not act as an appellate Court or Tribunal. It will not review or re-weigh the evidence upon which the determination of the inferior Court or Tribunal purports to be based or to correct errors of law in the decision."
9. We have carefully gone through the impugned order at Annexure-A passed by the CEGAT and having cerefully gone through the same, we do not find any error either on facts or law committed by it while passing the impugned order at "Annexure-A". Therefore, in absence of any valid reasons, we would not like to interfere with the impugned order at Annexure-A passed by the CEGAT which is passed in lawful exercise of its jurisdiction. Thus, ever if this second petition at the instance of the petitioners was maintainable, then also this Court would not like to interfere with such orders in its writ jurisdiction.
In view of the above discussion, this petition fails and dismissed.