Allowed

M/s.Aabha Mouldings v. Union of India

Telangana HC13 Dec 2012WP/35103/2012

Case brief

AI extract

What is this about?

This Writ Petition challenges an order dismissing an appeal for non-default in pre-deposit. The court set aside the dismissal because the petitioner acted diligently and paid the demand after technical delays, directing the authority to restore the appeal and grant a personal hearing.

What did the court decide?

Impugned order set aside; appeal restored to file; direction to pass order on merits after personal hearing.

M/s.Aabha Mouldings Vs Union of India — Banking and Recovery | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S. RAMACHANDRA RAO

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WP No.35103 of 2012

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Order : ( Per Sri MSR, J )

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In this Writ Petition, the petitioner challenges the Order in Appeal No.198 of 2012 (H-IV) CE dated 6.9.2012 of the 4^th respondent and seeks a direction to the 4^th respondent to pass an order in the said appeal on merits after granting an opportunity of personal hearing to the petitioner.

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The petitioner firm is engaged in the manufacture of plastic bottles on job work basis for M/s. Shalimar Chemical Works Limited, Kolkatta ( for short “Shalimar”). As per the agreement between the petitioner and Shalimar, it is contended that Shalimar supplies plastic granules and corrugated packing boxes to the petitioner; that the petitioner coverts these granules into plastic bottles and supplies such bottles to Shalimar; that the bottles manufactured are printed with the brand name “Shalimar” Coconut Oil in the petitioner’s factory; and that Shalimar pays conversion charges to the petitioner for manufacture of plastic bottles.

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While so, a show cause notice dated 3.8.2011 was issued to the petitioner by the 2^nd respondent

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Additional Commissioner demanding central excise duty of Rs.49,05,985/- for the period July 2006 to March 2010. In the said notice, the 2^nd respondent also proposed penalty under Section 11 AC of the Central Excise Act, 1944 ( for short “the Act”), penalty under Rule 25 of the Central Excise Rules, 2002 and also interest under Section 11 AB of the Act. The basis of the demand was that the petitioner was not entitled to the benefit of SSI notification No.8/2003/CE dated 1.3.2003 (as amended) as the petitioner used brand name of “Shalimar” on the plastic bottles manufactured by them.

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The petitioner submitted a reply dated 12.12.2011 rebutting the allegations made in the show cause notice. It contended that the intention of the legislature had always been to extend the benefit of SSI exemption to the plastic bottle manufacturers bearing the brand name of others and that in any event, the demand was barred by limitation.

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By Order in Original No.22/2012-ADJN. (COMMR.)CE dated 29.2.2012, the 2^nd respondent rejected the submissions of the petitioner and confirmed the demand proposed in the show cause notice and imposed an equal penalty under section 11 AC of the Act and a further penalty of Rs.25,00,000/- under Rule

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25 of the Central Excise Rules, 2002.

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Challenging the same, the petitioner filed an Appeal no.41/2012(H-IV)CE along with stay application No.48/2012 (H.IV) CE before the 4^th respondent.

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The 4^th respondent passed order in Stay Petition No.48/2012 (H.IV) CE dated 8.6.2012 directing the petitioner to deposit 50% of the ‘service tax’ amount ( obviously a mistake for ‘central excise duty’ ) demanded in the order dated 29.2.2012 passed by the 2^nd respondent by 20.6.2012.

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The petitioner by letter dated 19.6.2012 requested the 4^th respondent to extend the time upto 27.7.2012 to comply with the above order in view of the financial difficulties faced by it.

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The 4^th respondent extended the time only upto 27.7.2012vide his letter dated 19.6.2012 .

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On 23.7.2012, the petitioner filed W.P.No.22538 of 2012 against the order dated 8.6.2012 in Order in Stay Petition No.48/2012 of the 4^th respondent. By order dated 25.7.2012, this Court granted time of six weeks from 25.7.2012 i.e. upto 5.9.2012 for making predeposit.

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The petitioner, by letter dated 30.7.2012 informed the 4^th respondent about the order dated 23.7.2012 in

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W.P.No.22538 of 2012 (extending the time for pre deposit upto 5.9.2012) and requested the 4^th respondent to adjourn the final hearing fixed in the matter by six weeks so as to enable it to make the pre deposit. It also gave another letter dated 3.8.2012 along with the copy of the order dated 25.7.2012 in W.P.No.22538 of 2012 and again requested for an adjournment of the final hearing of the main appeal.

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When the petitioner approached the Department for making pre-deposit, it was advised to register online with ACES as “non assessee” for making payment of pre-deposit on line. Accordingly, the petitioner registered itself as a non assessee on 4.9.2012 and it was also allotted with registration number.

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On 4.9.2012, the petitioner informed the 4^th respondent that the time of six weeks granted by the High Court for making the pre-deposit expires on 5.9.2012; that they were making sincere efforts to make the pre-deposit on line as suggested by the department; that they had already registered under non SSI category and had approached the Indian Overseas Bank, Adarshnagar Branch, Hyderabad to make the payment of pre-deposit online; that the bank informed the petitioner that their registration number was not found in

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the Assessee Master as it may take 2 or 3 days for updating the new registrations by NSDL; and therefore they requested the 4^th respondent to extend time for making pre-deposit by 2 or 3 days until the bank accepts their remittance.

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On 5.9.2012, when the petitioner approached the said bank to make payment of pre-deposit on line, the bank informed the petitioner that its registration number was not found in the Assessee Master and therefore the petitioner could not make payment of pre-deposit online on 5.9.2012 also (which was the last day for making predeposits as per the order of the High Court mentioned supra). The petitioner had also obtained demand drafts for Rs.24,52,993/- on 5.9.2012 in favour of “Chief Accounts Officer, Central Excise, Hyderabad IV Commissionerate” towards the 50% demand. By its letter dated 6.9.2012, this was also informed to the 4^th respondent by the petitioner and the petitioner stated that it was approaching the High Court for further extension of time and the 4^th respondent should await for the orders to be passed by the High Court.

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The petitioner filed WPMP No.35502 of 2012 in WP No.22538 of 2012 seeking further extension of time and by order dated 7.9.2012, this Court granted further time of one week from that date for complying with the

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order of this Court dated 25.7.2012 i.e. upto 14.9.2012. On 7.9.2012, the petitioner complied with the order and deposited the 50% amount of demand i.e. Rs.24,52,993/- online by way of challan in Indian Overseas Bank and also enclosed proof of payment along with a letter dated 7.9.2012 addressed to the 4^th respondent.

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In the meantime, on 6.9.2012, the 4^th respondent dismissed the appeal no.41/2012(H-IV)CE dated 6.9.2012 by order in appeal No.198/2012(H-IV) CE on the ground that the petitioner did not comply with the pre-deposit of 50% as per the order dated 8.6.2012 of the Order in Stay petition No.48/2012 (H-IV) CE as extended by the order dated 25.7.2012 in W.P.No.22538 of 2012.

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Challenging the same, the present writ petition is filed contending that the 4^th respondent should have waited for the orders passed by the High Court for further extension of time; that the petitioner had acted diligently and had attempted to comply with the orders of making of pre-deposit but due to circumstances beyond its control i.e. the delay in uploading the petitioner’s registration number in the Assessee Master by NSDL, the order could not be complied with initially ; but subsequently the petitioner had complied with the

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making of pre-deposit on 7.9.2012 online within the extended period of one week from 7.9.2012 granted by the High Court by its order dated 7.9.2012 in WPMP No.35502 of 2012 in W.P.No.22538 of 2012; and that the impugned order in Appeal passed by the 4^th respondent be set aside, the appeal be restored to his file and be directed to be disposed of after giving a personal hearing to the petitioner.

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Heard the learned counsel for the petitioner and Sri Gopala Krishna Gokhale, learned Standing Counsel for the respondents.

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We are of the opinion that the petitioner had acted all and was diligently through prevented by circumstances beyond his control from complying with the requirement of making of pre-deposit within the period of six weeks granted by the High Court in its order dated 25.7.2012 in W.P.No.22538 of 2012 i.e. by the delay in the uploading of the petitioner’s registration number in the Assessee Master by NSDL i.e. before 5.9.2012; that the petitioner did comply with the order on 7.9.2012 within the extended period of one week from 7.9.2012 granted by this Court by order dated 7.9.2012 in WPMP No.35502 of 2012 in W.P.No.22538 of 2012; and therefore, the impugned order dated 6.9.2012 in Appeal No.198/2012 (H-IV)CE in appeal No.41/2012 (H-

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IV) CE of the 4^th respondent deserves to be set aside. Accordingly, the order dated 6.9.2012 in Appeal No.198/2012 (H-IV)CE in appeal No.41/2012 (H-IV) CE of the 4^th respondent is set aside and the said appeal is restored to the file of the 4^th respondent. The 4^th respondent is directed to dispose of the said appeal after providing a personal hearing to the petitioner.

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The writ petition is allowed as above. No costs.

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JUSTICE GODA RAGHURAM

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JUSTICE M.S. RAMACHANDRA RAO

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Dated : 13/12/12 Kk

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THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S. RAMACHANDRA RAO

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WP No.35103 of 2012

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Dt: 13/12/12

M/s.Aabha Mouldings v. Union of India

Case brief

What is this about?

What did the court decide?

M/s.Aabha Mouldings v. Union of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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