M/S. Global Syntex (Bhilwara) LTD. vs. Costoms,Excise And Service Tax Appellate Tribunal

Held

The Court held that the writ petition under Article 226 of the Constitution of India was not the proper remedy. It reasoned that an appeal under Section 35G of the Central Excise Act, 1944, lies against orders passed by the CESTAT before the High Court. The Petitioner had previously availed this remedy by filing an appeal against an earlier CESTAT order. Therefore, the Petitioner could not circumvent this statutory course of action by filing a writ petition. Furthermore, the Court noted that the present writ petition challenged an order passed by the CESTAT on 07.02.2012, while the petition was filed on 31.08.2018, indicating a delay of over six years. The Court viewed this as a subterfuge to overcome the hurdle of limitation. Consequently, the Court found the writ petition to be not maintainable and dismissed it in limine. The Court did not explicitly decide on the merits of the Petitioner's delay in deposit, as the primary issue was the maintainability of the writ petition.

Facts

M/s. Global Syntex (Bhilwara) Ltd. (Petitioner) challenged an order dated 07.02.2012 passed by the Customs Excise & Service Tax Appellate Tribunal (CESTAT). The Petitioner was issued a show cause notice on 03.07.2002, leading to an order dated 26.03.2003 by the Commissioner of Central Excise, demanding Rs. 2,23,64,285/- and a like penalty. The CESTAT initially set aside this order. A subsequent order dated 23.08.2004 confirmed the duty demand and imposed an equal penalty under Section 11AC of the Central Excise Act, 1944. The CESTAT, on 07.02.2005, directed the Petitioner to deposit Rs. 25 lacs within eight weeks. Due to financial constraints, the Petitioner failed to comply, leading to the vacation of stay and rejection of its appeal by the CESTAT on 13.05.2005. The Petitioner's appeal against this rejection was dismissed by the High Court on 03.02.2006, with liberty to restore the appeal upon depositing Rs. 25 lacs. The Petitioner approached the Board of Industrial and Financial Reconstruction (BIFR), which directed the Petitioner to deposit Rs. 25 lacs within two weeks, with a corresponding direction to the CESTAT to hear the appeal. The Petitioner deposited the amount on 25.06.2010, after approximately 15 weeks. The CESTAT dismissed the Petitioner's application to recall its earlier order on 07.02.2012.

Key Issues

1. Whether the writ petition under Article 226 of the Constitution of India is a proper remedy against the order dated 07.02.2012 passed by the CESTAT, considering that an appeal under Section 35G of the Act of 1944 lies against such orders. 2. Whether the Petitioner's delay in depositing the Rs. 25 lacs, as directed by the BIFR, justified the CESTAT's dismissal of its application to recall the order rejecting its appeal. Petitioner's Contention: The Petitioner argued that it approached the BIFR due to financial distress, and the BIFR directed the CESTAT to hear its appeal upon deposit of Rs. 25 lacs. The Petitioner deposited the amount as per the BIFR's direction and sought restoration of its appeal. Revenue's Contention: The Revenue contended that the Petitioner had a statutory remedy of appeal under Section 35G of the Act of 1944 against the CESTAT's order and that the writ petition was filed after a significant delay, possibly to overcome the limitation period.