Prakash Industries Ltd vs Cce & St, Indore

[Arising out of Order-in-Original No.14/COMMR/CEX/IND/12-13 dated 29th March, 2013 passed by the Commissioner of Customs, Central Excise & Service Tax, Indore]

For approval and signature:

HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1. Whether Press reporters may be allowed to see the

order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the

CESTAT (Procedure) Rules, 1982 for publication in

any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

Prakash Industries Ltd. Appellant

Vs.

CCE & ST, Indore  Respondent

Present for the Appellant : Shri. G.L.Rawal, Sr. Advocate &

Shri Rohit Choudhary, Advocate

Present for the Respondent: Shri.Ranjan Khanna, DR

Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)

HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 10/02/2015

Final ORDER NO. 50459/2015

PER: RAKESH KUMAR

In this case the Tribunal vide stay order No.51941 dated 03.06.2014 had directed the appellant to pre-deposit an amount of Rs.12.00 Crores within a period of four weeks and compliance was to be reported on 4th August, 2014. On deposit of this amount within the stipulated period, the requirement of pre-deposit of balance amount of the duty demand interest and penalty for compliance with the provisions of section 35 F would stand waived and recovery thereof stayed. Against this order of the Tribunal, the appellant filed an appeal before Honble Chattisgarh High Court at Bilaspur and Honble High Court vide judgment dated 24th June, 2014 refused to interfere with the order passed by the Tribunal and dismissed the appeal. Against this order of Honble Chattisgarh High Court, the appellant filed an SLP before the Apex Court and the Apex Court vide order dated 30th June, 2014 dismissed the SLP and granted four weeks time for compliance with the directors of the Tribunal.

2. The appellant have filed two Misc. Applications in respect of the stay order. The first Misc. Application is that while the stay order mentions that the appeal arises out of order in appeal No.COMMR/CEX/IND/12-13 dated 29.03.2013 passed by the Commissioner, Central Excise & Service Tax, Indore, the appeal was filed against order in Original and not order in appeal. This Misc. Application for rectification of this mistake apparent from record is allowed. Accordingly, the word Order in Appeal at the top of Stay Order should be read as Order in Original.

3. The second Misc. Application which has been filed on 23rd July 2014 prays for allowing the appellant to deposit the directed amount in 12 equal monthly instalments.

4. Heard Shri G.L. Rawal, Senior Advocate and Shri Rohit Choudhary, Advocate, the learned Counsels for the appellant and Shri Ranjan Khanna, the learned DR.

5. We find that the Tribunals order dated 30th June, 2014 directing the appellant to deposit an amount of Rs.12.00 Crore for compliance with the provisions of section 35 F within four weeks time had been challenged by the appellant before Honble Chattisgarh High Court and Honble Chattisgarh High Court vide order dated 24th June, 2014 had dismissed the appeal. The order of Honble High Court does not extend the time for pre-deposit, as the compliance date in the stay order No.3614 was dated 4th August, 2014. The appellant challenged the High Courts order before the Apex Court by filing an SLP. The Apex Court vide order dated 30th June, 2014 while dismissing the SLP has granted only another four weeks time from the date of the order. Once the Tribunals order has been upheld by the High Court, the Tribunals order merges with the High Courts order and since the SLP against the High Courts has been dismissed by the Supreme Court, in view of this position, the Tribunal cannot interfere with its earlier order dated 03.06.2014.

6. At this stage, Shri G.L. Rawal, Sr. Advocate, the ld. Sr. Counsel for the appellant cited judgment of Honble Delhi High court in the case of Rakesh Kumar Garg vs. Commissioner of Central Excise, Delhi reported in 2011 (269) ELT 56 (Del.) wherein Honble Delhi High Court, even after dismissal of the SLP by the Apex Court had allowed for recovery of the penalty from the appellant in instalments. Shri Rawal, accordingly, pleaded that notwithstanding the dismissal of SLP by the Apex Court against the High Courts order dismissing the appeal, the Tribunal can allow the appellant to deposit the directed amount in instalments. In this regard he also cited the judgment of the Tribunal in the case of RK Texcon (India) vs. CCE, Jaipur reported in 2000 (122) ELT 485(Tribunal) and also in the case of Sigma Diagnostics P. Ltd. vs. CCE, Vadodara-II reported in 2009 (236) ELT 598 (Tri.Admd.) wherein considering the appellants willingness to pay the directed amount for compliance with the provisions of section 35 F the Tribunal had permitted the deposit of the amount in instalments.

7. Coming first to the Tribunals order in the case of Rakesh Kumar Garg vs. CCE, Delhi (supra) cited by the ld. Sr. Counsel, it is seen that from para 3 of the order it is clear that this order is in respect of appeals against the Tribunals order reported in 2010 (257) ELT 289 (Tri.) confirming the imposition of penalty on Shri R.K. Garg and two others to the extent of Rs. 5.00 Crores each. On going through the Tribunals order reported in 2010 (257) ELT 289 (Tri.Del.), it is seen that this order is a final order in respect of appeals filed by Shri Devidas Garg, Shri R.K. Garg and Shri S,K,. Garg and by this order, the Tribunal had upheld the imposition of penalty of Rs.5.00 Crores on each of these three persons and as such, this is not an order of ordering pre-deposit for compliance with the provisions of section 35F. From the order dated 23.03.2011 of Honble Delhi High Court, it appears that Honble Delhi High Court in respect of appeal filed against Tribunals final order had ordered deposit of balance amount of penalty of Rs.3.00 Crores and SLP to Apex Court against this order had been dismissed. Dismissal of SLP by Apex Court does not result in the merger of the order impugned with the Apex Court order. It is in the background of these facts that Honble Delhi High Court vide order dated 22.03.2011 allowed instalment facility. The facts of this case are totally different. In view of this, in our view, the judgment of Honble Delhi High Court in the case of Rakesh Kumar Garg vs. CCE, Delhi reported in 2011 (269) ELT 56 (Del.) has no application to this case.

8. Similarly, in the other cases  Sigma Diagnostics P. Ltd. vs. CCE, Vadodara-II reported in 2009 (236) ELT 598 (Tri.Admd.), RK Texcon (India) vs. CCE, Jaipur reported in 2000 (122) ELT 485(Tribunal) where the Tribunal had permitted the appellant to deposit the directed amount under section 35 F in instalments, there was no challenge to the Tribunals order before High Courts.

9. In this case, the Tribunals order directing the appellant to deposit an amount of Rs.12.00 Crores within a period of four weeks had been upheld by Honble Chattisgarh High Court and an SLP against the Honble High Courts order had been filed. The Apex Court while dismissing the SLP had directed that the amount to be deposited within a period of four weeks from the date of the order. In view of this position, we are of the view that it is the Judgement of Honble Delhi High Court in the case of CCE vs. Lindt Exports reported in 2012 (278) ELT -887 (Del.) which would be applicable and as such the Tribunal has no jurisdiction to modify its order dated 03.06.2014 which in our view, stands merged with the judgment of Honble Chattisgarh High Court. Honble Allahabad High Court in a recent judgement dated 12.11.2014 in case of Kissan Gramudyog Sansthan vs. CCE, Kanpur reported in 2015 (316) ELT 406 (All.) has held that once the appeal against Tribunals stay order under Section 35 of the Central Excise Act, 1944 is dismissed by a High Court, the Tribunals stay order merger with the High Courts order and the Tribunal cannot modify its stay order and extend the period of pre-deposit.

10. The Misc. Application for modification is, therefore, dismissed. Since the appellant have not complied with the directions of Tribunals order which has been upheld by the judgement of Honble Chattisgarh High Court and the judgment of Honble Chattisgarh High court stands affirmed by the Apex Court, the appeal is also dismissed for non-compliance of the provisions of section 35F.

[Dictated & Pronounced in the open Court].

(S.K.MOHANTY) (RAKESH KUMAR)

MEMBER (JUDICIAL) MEMBER (TECHNICAL)

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