Full Judgment
2. Notice of this application was issued to the appellant non-applicant M/s. Vidharba Pharmaceutical (P) Ltd. In response to the notice, Shri Gopal Prasad, learned Consultant has appeared for the appellant. Shri Gopal Prasad stated that the appellant inspite of best efforts could not comply with the terms and conditions of stay order aforesaid and that appellant proposes to deposit the duty demanded within two months and for the purpose two months time may be granted to the appellant and the appeal may not be rejected for non-compliance with the requirement of Section 35-F of the Act. He also stated that ordinarily the appeal would have come up for hearing not now but sometime in 1987-88 and therefore, it would be harsh to the appellant if his appeal were to be rejected on the ground of non-compliance with Section 35-F of the Act.
3. Shri Sunder Rajan, learned Departmental Representative opposed the request for grant of time. He submitted that the requirement with Section 35-F of the Act was pre-condition for the appeal to the Tribunal and failure to comply with the same would render the appeal non-maintainable at the thresh-hold itself. As the stay order in favour of the appellant was granted, infirmity of non-maintainability could be said to have removed only on condition the appellant complied with the terms and conditions of the stay order. The appeal became liable to rejection after the appellant failed to comply with the terms and conditions of the stay order.
4. We have carefully considered the arguments advanced by both the parties and taken into consideration the relevant material on record.
It might be mentioned that the appellant had made before the Tribunal an application for modification of the stay order No. C41/85-C dated 14.3.85. This application was rejected by the Tribunal by Order No.C-124/85 dated 19.6.85. Accepting Shri Gopal Prasad's request for grant of time would mean the modification of the earlier two orders and the appellant would directly have achieved what the Tribunal declined to grant directly an the application made by the appellant. We, therefore, do not accede to Shri Gopal Prasad's request for grant of time to the appellant to deposit the duty. Even otherwise, acceding to such request would mean modification of the stay order No. C-41/85-C dated 14.3.85, which has already been declined by the Tribunal as per details set out above.
5. For ease of reference and proper appreciation Section 35-F of the Act is reproduced below - "Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case, the Collector (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Collector (Appeals) or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit".
6. From the main provision reproduced above, it would be seen that the provision enjoins the person desirous of appealing against the decision or order pending the appeal to deposit with the adjudicating authority the duty demanded or the penalty levied unless the person succeeds in getting an order from the Tribunal dispensing with such deposit. What is to be seen is when or how long can an appeal be said to be pending.
T.P. Mukherjee's Law Lexican 1982 Edition refers to meaning of 'Pending' in Stroud's Judicial Dictionary in the following words - "A legal proceeding is pending as soon as commenced and until it is concluded".
Thus, the appeal can be said to be pending as soon as it is commenced by the appellants by presenting the same before the Tribunal. The appellant cannot contend that he will deposit the duty or penalty not when he presents the appeal but when after a few months or years, it is actually taken up for hearing. The appeal may actually be taken up for hearing after a few months or years due to administrative or precedural reasons or due to arrears having accummulated but legally there is no bar to its being taken up for hearing soon after it is presented after following the procedure of notice to the party - time for cross objection and the like. On so doing, the appellants can be called upon to satisfy whether the main part of the provision has been complied with unless, as already pointed out, the appellant has obtained an order dispensing with such deposit under the provision and he has complied with such order. In view of this position, we do not see any merit in Shri Gopal Prasad's submission that ordinarily the appeal would have been taken up for hearing in 1987 or 1988 and rejection of the appeal at this stage for non-compliance with the provision would be harsh for the appellant. We must however, make it clear that in a matter like this, there cannot be inflexible rule and each case regarding grant of time to deposit duty would have to be judged on its own merit.
7. In Customs Act, 1962, there is a similar provision under Section 129-E which was substituted by (Finance 2 Act, 1980) for section 129 as it originally stood. The provision for this Tribunal was made only by this amendment. The requirement of deposit of duty and penalty in respect of an appeal was there even before this amendment. Interpreting this provision, the Supreme Court in Navin Chandra Chottelal v. Central Board of Excise &. Customs 1981 ELT 679(S.C.)=AIR 1971 SC 2280 had following to say - "Section 128 no doubt gives a right of appeal. But it is followed by Section 129(1) regarding making of deposit pending the appeal. It must also be noted that so far as the deposit of duty is concerned, the requirement regarding the deposit will come into force only if the goods in respect of which duty is demanded are not under the control of Customs authorities. Though Sub-section (1) of Section 129 may appear to make it necessary that an appellant should deposit the duty or penalty before his appeal could be heard on merits, the proviso whittles down the rigour of Sub-section (1). In this connection, it is to be noted that U/S 189 of the Sea Customs Act, 1878, it was obligatory on the part of an appellant to deposit the duty or penalty pending the appeal. There was no provision therein by which the appellate authority could waive the requirement regarding the deposit of the entire amount of duty or penalty. But in the Act by the proviso to Sub-section (1) of Section 129, which has been quoted above, discretion has been given to the appellate authority to either waive the deposit of the entire amount of penalty or duty or reduce the quantum to be so deposited if the appellate authority is of the opinion that the requirement regarding the deposit of the full amount of penalty or duty will cause undue hardship to an appellant.
No doubt Section 129 does not expressly provide for the rejection of the appeal for non-compliance with the requirement regarding the deposit of penalty or duty but when Sub-section (1) of Section 129 makes it obligatory on an appellant to deposit the duty or penalty pending the appeal and if a party does not comply either with the main sub-section or with any order that may be passed under the proviso the appellate authority is fully competent to reject the appeal of non-compliance with the provision of section 129(1). That is exactly what the first respondent has done in this case.
Accepting the contention of Mr. Trevedi will mean that the appeal will have to be kept on file for ever even when the requirement of Section 129(1) has not been complied with. Retention of such an appeal on file will serve no purpose whatsoever because unless section 129(1) is complied with, the appellate authority cannot proceed to hear an appeal on merits. Therefore, the logical consequence of failure to comply with Section 129(1) is the rejection of appeal on that ground".
8. In the instant case the appellant has neither complied with the requirement of pre-deposit of duty under the main part of the provision nor with the terms and conditions of stay order No. C-41/85 dated 14.3.1985. Therefore, following the Supreme Court decision (Supra), the respondent Collector of Central Excise, Nagpur's application for rejection of the appeal for non-compliance in the provision aforesaid is accepted. We accept the application and reject the appeal for non-compliance for section 35-F of the Act and order accordingly.