SCA/14578/2006 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 14578 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE M.S.SHAH HONOURABLE MR.JUSTICE RAVI R.TRIPATHI ========================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================= GUJARAT SHIP TRADING CORPORATION Versus UNION OF INDIA THR' SECRETARY AND OTHERS ========================================= Appearance : MS AMRITA M THAKORE for the Petitioner MR PURVISH J MALKAN for the Respondents ========================================= CORAM : HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE RAVI R.TRIPATHI Date : 13/02/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE M.S.SHAH) This petition under Article 226 of the Constitution is directed SCA/14578/2006 2/8 JUDGMENT against the order dated 04.01.2005 of the Customs Excise & Service Tax Appellate Tribunal, Mumbai ('the Tribunal' for brevity) dismissing the petitioner's applications for condonation of delay in filing appeals against the orders passed by the Commissioner (Appeals) dismissing the petitioner's appeals for non compliance with the orders of pre-deposit. 2. The broad facts leading to filing of this petition are as under: 2.1 The petitioner, a partnership firm, was engaged in the business of importing various vessels/ships and breaking them at Alang Ship Breaking Yard. The petitioner brought four vessels for breaking during period from 1991 to 1996. On filing bills of entries, Central Excise and Customs Department had made assessment and the demand for differential duty was confirmed. 2.2 Aggrieved by the order dated 30.03.2001 passed by the Deputy Commissioner, Central Excise, Bhavnagar, the petitioner preferred appeals before the Commissioner of Central Excise (Appeals) along with stay applications. When those stay applications came up for hearing, the Commissioner (Appeals) passed orders dated 19.09.2001 under Section 129-E of the Customs Act granting conditional stay of the Order in Original upon deposit of 90% of the amount payable under the said Order in Original passed by the adjudicating authority. Since the petitioner was not in a position to deposit the said amount, the petitioner's appeals came to be dismissed by the Commissioner (Appeals) by SCA/14578/2006 3/8 JUDGMENT order dated 25.06.2002. 2.3 Aggrieved by the said orders, the petitioner preferred appeals along with stay applications before the Tribunal at Mumbai. The petitioner had also filed applications for condonation of delay. The Tribunal dismissed the applications for condonation of delay on the ground that the explanation offered by the petitioner was not satisfactory. The said orders dated 04.01.2005 of the Tribunal have been challenged in this petition. 3. This petition earlier came to be dismissed on 12.10.2006 on the ground that the petition itself was filed after delay. The petitioner thereafter filed review application being Misc. Civil Application No.2943 of 2006 stating that the petitioner was prepared to pay the balance amount of duty as per the order dated 25.06.2002 of the Commissioner (Appeals). By order dated 24.07.2007, this Court allowed the review application in the following terms: “Considering the submissions and for substantial justice, we hereby order that in case the petitioner pays the balance amount of duty and penalty, if any, as per order dated 25.06.2002, our order dated 12.10.2006 stands recalled and the delay condoned. It is also made clear that the balance amount of duty, and penalty if any, as per order dated 25.06.2002 be paid within two weeks from today. If the petitioner pays the balance amount of duty within two weeks, the review petition also SCA/14578/2006 4/8 JUDGMENT stands allowed.” 4. There is no dispute about the fact that the petitioner paid the balance amount of duty within two weeks. Accordingly, the review petition stood allowed and the present petition has now reached hearing before us. 5. Mr.P.J.Malkan, learned Standing Counsel for the respondents has raised a preliminary objection that in similar matters, this Court has taken the view that when writ petitions are filed for challenging the orders passed by the Tribunal in the applications for delay, alternative remedy of filing Tax Appeals is available and therefore, such petitions should not be entertained. 6. It is true that, when alternative remedy is available, petitions under Article 226 are ordinarily not be entertained. However, the peculiar facts of this case are that the petitioner's appeals before the Commissioner (Appeals) were dismissed only on the ground that the petitioner had not deposited 90% of the amount as per the pre-deposit order passed by the Commissioner (Appeals). As per the pre-deposit order of the Commissioner (Appeals), requiring the petitioner to deposit 90% of the duty amount, the entire 90% duty amount has already been paid by the petitioner and on that very ground, this Court allowed the review petition. In the present petition, therefore, we are really not called upon to decide any disputed questions of fact as such and in the interest of justice, we are inclined to remit the matters back to the Commissioner SCA/14578/2006 5/8 JUDGMENT (Appeals) to decide the appeals on merits. 7. Since the delay in filing appeals before the Tribunal was not insignificant, we may refer to the following explanation given by the petitioner for the delay in filing appeals before the Tribunal: “6. As stated above, the applicant had incurred huge losses and had been constrained to stop its ship-breaking activity since 2001 and its rights in the plot were also subsequently sold by the Bank in order to recover the dues. In fact, there was a deep recession prevailing in the ship-breaking industry on account of which Shri Ashok N.Patel, who was the only person handling the firm, was compelled to wind up the business and start a new business of building and road contractors on account of which, he was required to stay outside Bhavnagar for work for very long periods and rarely visited Bhavnagar and the firm's office at Bhavnagar remained closed and all employees had to be retrenched. The order dated 25.6.2002 appears to have been delivered to some other office in the building and the applicant had no knowledge of the same. It appears that thereafter a notice dated 21.4.2003 was also delivered to some other office in the building and was handed over to Shri Patel at his residence much later. The said order dated 25.6.2002 came to light only when the said notice for recovery of the outstanding dues was handed over to Shri Patel. 7. The applicant immediately made inquiries from other ship-breakers and came to know that, in various other cases of identical nature, the ship-breakers had gone up to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and their cases had been remanded for de novo adjudication and that on re-adjudication, the duty liability on SCA/14578/2006 6/8 JUDGMENT bunkers had been reduced to an extent of 30% to 50%.” 8. Learned counsel for the petitioner states that the amount deposited by the petitioner with the respondent is Rs.24,28,023/- as against the duty amount of Rs.24,27,881/-. According to the petitioner, therefore, the entire duty amount has been deposited. Mr.Malkan, learned Standing Counsel for the department does not admit that 100% of the duty amount has been deposited, but he does not dispute that atleast 90% of the duty amount has already been deposited by the petitioner. 9. When in similar matters, order of remand were passed by the Tribunal for de novo adjudication and on re-adjudication, the duty liability is stated to have been reduced, we are of the view that the petitioner should not be deprived of the opportunity of agitating his grievances on merits of the dispute merely on the ground that initially, the petitioner had not deposited 90% of the duty amount as per the orders of the Commissioner (Appeals) and that such amounts came to be deposited only thereafter, during pendency of proceedings before this Court. A perusal of the above explanation would indicate that the petitioner had not abandoned his right to challenge the orders of the Commissioner (Appeals) and the subsequent conduct on the part of the petitioner in depositing the entire 90% amount as per the pre-deposit orders of the Commissioner (Appeals) also indicates bonafides of the petitioner. SCA/14578/2006 7/8 JUDGMENT 10. We are of the view that since for the reasons aforesaid, the matters are required to be remitted back to the Commissioner (Appeals) for deciding the appeals on merits in view of compliance by the petitioner with the direction for pre-deposit of 90% of the duty amount, no further discussion is warranted as regards the delay in filing the appeals before the Tribunal. 11. We accordingly allow this petition and set aside the orders dated 25.06.2002 in Appeal Nos.691 to 694 of 2002 and remand the matter to the Commissioner (Appeals), Ahmedabad for deciding the appeals on merits in view of pre-deposit of 90% of the duty amount, about which there is no dispute. Since the appeals are remitted back to the Commissioner (Appeals), the orders dated 04.01.2005 of the Tribunal dismissing the petitioner's appeals on the ground of delay are of no consequence and the said orders shall not come in the way of the Commissioner (Appeals) deciding the appeals on merits. 12. In view of the fact that the dispute is more than a decade old and the appeals should therefore be heard expeditiously, in order to save loss of time for the purpose of service of notice on the petitioner, we direct the petitioner or his representative to appear before the Commissioner (Appeals) on 27.02.2008. Subject to the petitioner cooperating for expeditious disposal of the appeals, the appeals may be heard and decided by 30.04.2008. Rule is made absolute accordingly with no order as to costs. SCA/14578/2006 8/8 JUDGMENT 13. Copy of this order is permitted to be served on the Commissioner (Appeals) by direct service and another copy shall also be made available to Mr.Malkan, learned Standing Counsel for the department. (M.S.SHAH, J.) (RAVI R.TRIPATHI, J.) *Shitole