1. Each of these applicants, filed an appeal before this Tribunal on 31-1-2002 against the order of the Commissioner of Central Excise, Surat, demanding duty of Rs. 86 lakhs approx, imposing equal penalty on the assessee, and imposing, inter alia, a penalty of Rs. 1 lakh on Hariharbhai J. Gandhi, its director. We are not concerned with other persons against whom this order has been passed.
2. By an order passed on 7-6-2002, the Tribunal directed deposit of Rs. 60 lakhs by the assessee noting that Rs. 20 lakhs has already been paid. The Tribunal did not, evidently by inadvertence, pass orders on the stay application filed by Hariharbhai Gandhi, 3. Sub-section (1) of Section 32PA(2) of the Act permits any person who has filed an appeal on to the Tribunal on or before 20th February, 2000 which was still pending to withdraw the appeal from the Tribunal and to file an application to the Settlement Commission to have his case settled. Subsequently, both the assessee and its director sought for permission to withdraw the appeals which were granted and made an application to the Settlement Commission for settlement of their cases.
This was done in terms of Section 32PA of the Act and there is no dispute about its applicability to the facts of this case. The assessee admitted its duty liability to the extent of Rs. 27.47 lakhs and deposited Rs. 7.47 lakhs before the Commissioner. The Commissioner admitted the application and fixed date for final hearing. On that day, it noted the absence of the applicant before it, did not accede to the written request made for adjournment and passed orders concluding that the assessee had not co-operated with the Commissioner in the proceedings and passed orders in Section 32 of the Act sending the case back to the jurisdictional Central Excise Officers.
4. The application now made before us is under Sub-section (7) of Section 32PA of the Act. The sub-section reads as follows : "Where an application made to the Settlement Commissioner under the section is not entertained by the Settlement Commission, then the appeals shall be deemed to have been revived before the Appellate Tribunal and the provisions contained in Sections 35B and 35D shall, so far as making apply accordingly." 5. In response to the doubt expressed by us, the Counsel for the applicant cites the judgment of the Supreme Court in Laxmi Rattan Engineering Works v. Assistant Commissioner, Sales Tax, Kanpur and Anr.
- 1968 (55) AIR 488 (S.C.) interpreting the word "entertain" occurring in Section 9 of the U.P. Sales Tax Act, 1948 to mean "to proceed to consider on merits" or "adjudicate upon". The same meaning has been applied to the word "entertain" occurring in Order XXI, Rule 90, proviso of the Civil Procedure Code 1908 in its judgment in Hindustan Commercial Bank Ltd. v. Punnu Sahu (Dead) Through Legal Representative - 1971 (3) SCC 124. We are therefore satisfied that the application made to the Settlement Commissioner not having been dealt with on merits, have not been entertained within the meaning of Sub-section (7) of Section 32PA of the Act and the appeals before the Tribunal are deemed to have been revived.
6. So far as the stay application filed by Hariharbhai Gandhi is concerned, after hearing the Counsel for this applicant, we consider deposit by him of Rs. 75,000/- towards penalty to be appropriate and direct deposit by him within two months from the receipt of this order and compliance to be reported on 30-4-2003.
7. An application for modification of the Tribunal's stay order relating to the assessee has also been filed.
8. It is contended that, subsequent to the stay order, there has been significant deterioration in the financial health of the applicant as a result of the general recession in the textile market, particularly because of floods, earthquake and riots in Gujarat. The net profit of the assessee, it is stated, after deduction of tax in the year 1998-99 was Rs. 6.46 lakhs; in the year 1999-2000 was Rs. 5.56 lakhs approx; and in the year 2000-01 was Rs. 4.76 lakhs. It is also contended that on merits the basis for the department's case, of the payment made by the applicant, a textile processor, to its contractor is faulty. The department records the statements of the person relied upon. It is further stated that Chandrakant Chowala, who was a witness to the panchanama relating to the accountal of goods, was also a witness to four other searches on the same date and he could not be present in these premises simultaneously, having regard to the distance between the places in question.
9. The Tribunal's order was passed on 15-5-2000 and we do not find any deterioration in the financial health of the company between then and now. So far as the arguments on merits are concerned, there is no reason as to why these arguments could not be raised earlier before this Tribunal. The Tribunal's order is quite lengthy and detailed, running into seven pages, and it is settled law that stay application cannot be argued piece-meal. We therefore do not find any reason for modification of our order.
10. We therefore order that unless the applicant produces proof of deposit of the amount remaining due, when the matter comes up for reporting compliance on 30-4-2003, the appeals are liable to be dismissed without any further notice.