Allowed

Vega Auto Accessories (Pvt) Ltd, v. Registrar, Customs, Excise & Service Tax Appellate Tribunal, & Anr.

Delhi HC9 May 2018W.P.(C)/2189/2018

Case brief

AI extract

What is this about?

Petitioner sought admission of appeal before the Appellate Tribunal without pre-deposit under Section 35F of the Central Excise Act, relying on a final tribunal order granting exemption notification benefits. The Court allowed the petition, directing the Tribunal to admit the appeal without pre-deposit, citing financial hardship and settled legal rights.

What did the court decide?

Directed the Tribunal to admit and hear the petitioner's appeal without insisting on a pre-deposit of 7.5% of tax and penalty.

Vega Auto Accessories (Pvt) Ltd, Vs Registrar, Customs… — Specific Performance | Delhi HC (2018)

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$~17

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* IN THE HIGH COURT OF DELHI AT NEW DELHI + WRIT PITITION (CIVIL) 2189/2018

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Date of Decision: 9^th May, 2018.

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M/s VEGA AUTO ACCESSORIES (PVT) LTD, ..... Petitioner

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Through Mr. Vibhor Mathur, Adv

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versus

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REGISTRAR, CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, & ANR. ..... Respondents

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Through Mr. Sanjeev Narula, Sr. Standing Counsel for Customs with Mr. Abhishek Ghai, Adv

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CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE CHANDER SHEKHAR

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SANJIV KHANNA, J. (ORAL)

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Petitioner M/s. Vega Auto Accessories (Pvt) Ltd is a company against whom adverse orders-in-original were passed by the Assistant Commissioner, Central Excise & Service Tax, Rampur (Uttar Pradesh). These orders pertain to different periods, albeit the primary issue was common, i.e., whether or not the petitioner had commenced commercial production on or before 31^st March, 2010, a requirement to obtain benefit of exemption under the Notification No.50/03-CE dated 10^th June, 2003. The finding in orders-in-original was that the petitioner had not commenced commercial production until 7^th April, 2010 and, therefore, did not fulfill the mandatory condition to avail the benefit under Notification dated 10^th June,

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W.P. (C) No.2189 /2018 Page 1 of 4

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Accordingly, the petitioner was liable to pay Excise Duty including Education Cess and Secondary Higher Education Cess as well as penalty of under Rule 25(1) of the Act.

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Some of the orders-in-original were made subject matter of the appeals before Customs, Excise & Service Tax Appellate Tribunal, which appeals were allowed vide order dated 6^th February, 2017 accepting the stand and stance of the petitioner that it had commenced commercial production on or before 31^st March, 2010.

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Respondent/Revenue had thereafter preferred several appeals before the High Court of Uttarakhand at Nanital which were dismissed vide order dated 5^th July, 2017 as not maintainable before the said High Court in view of the judgment in Central Excise Appeal No.10/2015, Commissioner of Central Excise & Sales Tax vs. M/s Trupati LPG Industries Ltd. decided on 4^th May, 2017. It is stated by the counsel for petitioner that respondents have not preferred any appeal before the Supreme Court impugning the order dated 6^th February, 2017 in the case of the petitioner passed by the Tribunal. In other words, the contention of the petitioner is that the order of the Tribunal dated 6^th February, 2017 that the petitioner had commenced commercial production on or before 31^st March, 2010, has attained finality and has been accepted.

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The petitioner has filed the present writ petition with a prayer that the appeal of the petitioner filed by Diary No.509852017 should be admitted for consideration and heard, without insisting on pre-deposit under amended Section 35F of Central Excise Act, 1944 in view of the earlier orders passed by the Tribunal which have attained finality, upholding stand and stance of

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W.P. (C) No.2189 /2018 Page 2 of 4

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the petitioner on claim of exemption under notification dated 10^th June, 2003.

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Learned counsel for the respondent/Revenue accepts that the Revenue has not till today preferred any appeal before the Supreme Court impugning the order of the Tribunal dated 6^th February, 2017 upholding and accepting the stand of the petitioner that they had commenced commercial production on or before 31^st March, 2010.

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In view of the aforesaid factual background, we are inclined to accept the prayer made by the petitioner that the appeal filed before Tribunal vide Diary No.509852017 should be admitted and heard without insisting on predeposit under amended Section 35F of the Central Excise Act. The petitioner has already succeeded before the Tribunal on the question of grant of exemption under notification dated 10^th June, 2003 in other connected appeals. The said order of the Tribunal has attained finality as no appeal has been preferred by the Revenue before the Supreme Court. Pre-deposit in these circumstances would be a technicality and mere formality for the issue is settled by an earlier order in favour of the petitioner. Secondly, the petitioner has expressed and shown financial hardship and distress by referring to balance sheet and profit and loss account for the year ending 31^st March, 2017, which reflects accumulated losses of over Rs.59,918,456.93. Petitioner, it is stated, had earlier made pre-deposit of Rs.16,43,400/- for hearing of decided appeals, which amount has not been refunded. This amount has been adjusted towards amount payable against the impugned order in original. The petitioner, it is stated, would have to make a further

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W.P. (C) No.2189 /2018 Page 3 of 4

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deposit of Rs.38 lacs approximately after accounting for and given benefit of Rs.16,43,400/-.

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The view taken by us is in consonance with the decision of this Court in Pioneer Corporation vs. UOI & Anr. 2016 (340) ELT 63 (Del) and decision dated 27^th April, 2018 in WP(C) 138/2018 Shubh Impex vs. UOI & Ors .

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Accordingly, we dispose of the present writ petition and direct that the Tribunal will admit and hear the appeal preferred by the petitioner without insisting on pre-deposit of 7.5% of the tax and penalty. We clarify that we have not considered and examined merits of the appeal preferred by the petitioner before the Tribunal. We also clarify that we have not specifically gone into the issue regarding the date of commencement of commercial production by the petitioner.

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The writ petition is accordingly disposed of, without any order as to costs.

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SANJIV KHANNA, J.

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CHANDER SHEKHAR, J.

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MAY 09, 2018 Sm/VKR

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W.P. (C) No.2189 /2018 Page 4 of 4

Vega Auto Accessories (Pvt) Ltd, v. Registrar, Customs, Excise & Service Tax Appellate Tribunal, & Anr.

Case brief

What is this about?

What did the court decide?

Vega Auto Accessories (Pvt) Ltd, v. Registrar, Customs, Excise & Service Tax Appellate Tribunal, & Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

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