M/S Saumya Mining PVT LTD. vs. Commissioner Of CGST And Cx Kolkata North Commissionerate

Facts

The appellant, M/s Saumya Mining Pvt Ltd., filed an appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT) in 2009, challenging an order passed by the Commissioner of CGST and CX, Kolkata North Commissionerate. The Tribunal, on April 19, 2010, directed the appellant to pre-deposit Rs. 2 crores for stay of recovery. The appellant challenged this order via a writ petition before the Calcutta High Court. The High Court disposed of the writ petition by directing the appellant to furnish and renew a bank guarantee of Rs. 1.25 crores and ordered the Tribunal to dispose of the appeal within six months. The appellant maintained the bank guarantee from 2010 to 2016. However, the Tribunal did not dispose of the appeal within the stipulated period. After approximately 11 years, when the appeal was finally taken up, the Tribunal dismissed it on July 28, 2023, solely on the ground that the bank guarantee was not renewed beyond 2016. The appellant's financial condition had deteriorated, and the delay in hearing caused uncertainty.

Held

The High Court held that the Tribunal erred in dismissing the appeal solely on the ground of non-renewal of the bank guarantee. The Court noted that the original writ petition before the High Court had two directions: one for furnishing and renewing the bank guarantee, and another directing the Tribunal to dispose of the appeal within six months. The Tribunal failed to comply with the second direction. The Court reasoned that the bank guarantee was an interim measure to protect the appellant from recovery during the pendency of the appeal. Therefore, the appeal should have been decided on its merits. The Court set aside the order of the Tribunal and restored both the appeal and the cross-appeal to the file of the Tribunal for hearing and decision on merits. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the CESTAT was justified in dismissing the appellant's appeal solely on the ground of non-renewal of the bank guarantee, given the significant delay in the disposal of the appeal by the Tribunal itself? (Question of law) Contentions: Petitioner/Appellant: Argued that the Tribunal dismissed the appeal with a "closed mind" on July 28, 2023, solely because the bank guarantee of Rs. 1.25 crores, ordered by the Calcutta High Court on September 6, 2012, was not kept alive. The appellant contended that a long period of almost 11 years elapsed between the High Court's order and the Tribunal's dismissal, and this delay was not attributable to the appellant. They relied on the High Court's order in WP No. 14712(W)/2010. Revenue/State: No specific arguments recorded for the revenue/State in the judgment.