Order of Commissioner (Appeals) does not reflect any application of mind - matter remanded by High Court
THE allegation against the petitioner is that he was involved in fraudulent exports of fabric and readymade garments of inferior quality by grossly inflating the value of the export goods so as to avail of duty drawback/DEPB benefits.
A penalty of Rs.15 lakhs was imposed on the petitioner under Section 114 of the Customs Act, 1962 by the adjudicating authority.
The lower appellate authority called upon the petitioner to effect deposit of Rs.7.50 lakhs as pre-deposit for obtaining a Stay in the matter.
Although the petitioner had sought an adjournment, the Commissioner(A) while ordering pre-deposit cited the Board Circular of 30/03/1999 and mentioned that there would be no irregularity if the stay petition is disposed of without a personal hearing; that the grant of a personal hearing on a petition for stay would be more of an exception than the rule and that while there would be no irregularity if a stay petition is disposed of without a personal hearing, nonetheless a reasoned order should be passed in an objective manner.
This is the purported reasoned order passed -
"I find that the instance case is prima facie case made out in favor of the revenue. Therefore, considering the balance of convenience, I order for pre-deposit of a part of the penalty amount as under before proceeding to decide the case finally."
The petitioner is before the High Court against this order.
It was observed that the Circular dated 30/03/1999 was quashed by a Single Judge of the Madras High Court in ITC Limited and s ubsequently on 6 th April 2000, another circular was issued by the CBEC emphasizing that the Commissioner of Appeals while passing an interim order ought not to pass non-speaking orders so as to obviate an allegation or complaint of a lack of application of mind by the authorities or a bias towards the revenue.
The High Court then adverted to the apex Court decision in Union of India vs. Jesus Sales Corporation ( ) and after considering its binding nature observed -
"…The judgment of the Supreme Court in Jesus Sales Corporation (supra), while holding that an order on an application for waiver of pre-deposit would not be invalid merely on the ground that no personal hearing had been afforded, nonetheless, holds that it is incumbent upon a quasi-judicial authority which is vested with the discretion to grant a waiver of deposit to take an objective decision after considering all relevant facts and circumstances having a bearing on the issue of undue hardship. In the present case, the order of the Commissioner (Appeals) does not reflect any application of mind whatsoever to the twin requirements of whether a prima facie case had been made out by the appellant as well as on the issue of financial hardship. The consequence of non-compliance with an order of pre-deposit is serious. The appeal would be liable to be dismissed for failure of deposit. Hence, it is incumbent upon the authority which adjudicates upon an application for waiver of pre-deposit to objectively consider whether the grounds on which a waiver is sought constitute undue hardship to the assessee. The authority is entitled to impose conditions to secure the interests of the revenue."
In fine, the High Court allowed the petition by setting aside the order and remitted the proceedings back to the Commissioner(Appeals) for a fresh decision.
See
Appellant is changing address for the third time and saying that they have not received the notice of hearing - they are misusing the opportunities of hearings and simply delaying the matter - Costs imposed.
Vide a Stay order dated 27/09/2012 the applicant's request for waiver of dues was dismissed for non-prosecution and the applicant was directed to deposit dues and report compliance on 14/11/2012.
On 14/11/2012, when the matter was called for compliance, then alsonone appeared on behalf of the applicant and no request for adjournment was made and once again the appellant was directed to comply with the stay order and report compliance on 03/01/2013.
When the case was called on 03/01/2013 again none appeared and the case was adjourned for hearing on 06/02/2013 and on 06/02/2013 the appellant sought adjournment and the stay application was listed for hearing on 13/03/2013.
On this date, the appellant appeared and submitted that they have filed a miscellaneous application for modification of the stay order on the ground that they had not received the notice for hearing and, hence, they could not be present on the dates of hearing.
The Bench could see through the ploy being adopted by the appellant and, therefore, observed -
"3. It can be seen that the appellant has never been present whenever the case was listed for hearing on four occasions and now he submits that there is a change in address. This is the third time the appellant is changing his address. The appellant seems to be misusing the opportunities of hearings and simply delaying the matter. Accordingly, we impose a cost of Rs.5000/- on the appellant, which have to be paid to the account of the Commissioner of Central Excise, Kolhapur within fifteen days from today. On such payment of cost, the appellant's application for modification shall be considered. The Registry is directed to list the application for hearing on 26/04/2013."
Surprisingly, the Board Circular 967 is nowhere to be seen - catching forty winks !