Supreme Court of India
M/S. ALEX ENTERPRISES & ANR.versusUNION OF INDIA & ORS.
- Citation
- 2009 INSC 326
- Decided
- 5 March 2009
- Disposal
- Dismissed
- Bench
- ARIJIT PASAYAT
Holding
The appeal is dismissed as an abuse of process; the appellant is not entitled to a waiver of the pre‑deposit and the order of the CEGAT stands.
Summary
The appellant, M/s Alex Enterprises, had obtained customs duty drawback of Rs.42,90,226 on export consignments whose sale proceeds were never repatriated, thereby violating Section 142B of the Customs Act. The Customs authorities ordered recovery of the drawback amount along with a penalty of Rs.20,00,000 and directed the appellant to make a pre‑deposit of Rs.42,00,000 by a specified date. The appellant repeatedly failed to comply, sought multiple extensions, and filed several writ petitions and review applications, which were dismissed by the High Court. The appellant contended that Rule 16(a) of the Customs and Central Excise Duties Drawback Rules, 1995 entitled it to a waiver of the pre‑deposit. The Supreme Court held that the appellant’s dilatory conduct and failure to make the deposit barred any relief and that the appeal was an abuse of the process of law, consequently dismissing the appeal. No order as to costs was made.
Issues considered
- Whether the appellant is entitled to a waiver of the pre‑deposit of the drawback amount under Rule 16(a) of the Customs and Central Excise Duties Drawback Rules, 1995.
- Whether the appellant’s failure to make the pre‑deposit and its repeated extensions constitute an abuse of the process of law warranting dismissal of the appeal.
- Whether Section 1298 of the Customs Act can be invoked to dismiss the appeal for non‑compliance with the pre‑deposit order.
Legislation cited
- Customs Act, 1962s. 1298, s. 142B
Subjects
duty drawbackcustomspre‑depositpenaltyabuse of processdilatory tacticsSection 142BSection 1298Rule 16(a)export proceedsfraud
Judgment
[2009] 4 S.C.R. 925
,l
M/S. ALEX ENTERPRISES & ANR. A
v.
.' UNION OF INDIA & ORS .
Civil Appeal No. 947 of 2004
MARCH 5, 2009
B
[DR. ARIJIT PASAYAT AND ASOK KUMAR GANGULY,
JJ.]
•
.;.·
Customs Act, 1962/Customs and Duty Drawback Rules,
1995 - s. 75 rr 16 and 16 A - Recovery of Drawback with
penalty- Export of goods under the claim of Duty Drawback -
c
Auction of the goods by port authorities, as the same not
cleared by consignee - No realization of export proceeds by
the nodal Bank - Exporter admitted to have obtained Duty
Drawback fraudulently-Arrest of exporter- Notice by Customs
.. Authorities seeking recovery of Drawback amount with penalty D
- Demand confirmed - Appeal before Tribunal - Tribunal
directing the exporter to pre-deposit the Duty Drawback by a
particular date - Order of pre-deposit challenged before High
Court - High Court extending the time for pre-deposit - Further
applications for extension of time - Tribunal dismissing the E
application seeking to dispense with the requirement of pre-
'
• deposit, ex-parte - Writ petition seeking restoration of appeal,
dismissed - Further writ petition seeking quashing of entire
subsequent proceedings dismissed upto Supreme Court -
Appeal against order of Tribunal directing pre-deposit and F
dismissing the appeal - Held: In view of the fact that the
exporter adopted various dilatory methods, ·not entitled to any
relief - The appeal is an abuse of process of Law -
Administration of Justice - Abuse of process of Law.
..
>
\,
~
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 947 G
of 2004
From the Judgement and Order dated 29.04.2002 &
07.10.2002 of the Custom, Excise & Gold (Control) Appellate
925 H
926 SUPREME COURT REPORTS [2009] 4 S.C.R.
A Tribunal, New Delhi in A.No. C/153/02-D vide order No. S/101/ 'I
02-D and M/19/02-D and 243/02-D. ,-
;
Sunil K. Tekriwal, V.N. Raghupathy, for the Appellants.
Mohan Parasaran, ASG, C.V.S. Rao, Kul Bharat, Anil
B Katiyar, B. Krishna Prasad, for the Respondent.
The Judgement of the Court was delivered by
DR. ARIJIT PASAYAT, J.
1. Challenge in this appeal is to the judgment of the
c Customs Excise and Gold Control Appellate Tribunal, New Delhi
(in short the 'CEGAT'). By the impugned order the application
filed by appellants seeking waiver of the pre deposit of duty
amount of Rs.42,90,226/- and penalty of Rs.20,00,000/-
confirmed by the Commissioner of Customs. The High Court
D directed deposit of Rs.42,00,000/- on or before 30.7.2002.
Since the amount was not deposited by order dated 7.10.2002,
the appeal was dismissed.
2. Learned counsel for the appellant submitted that the
CEGAT did not consider the various questions in its proper
E perspective. The appellant was entitled to the benefits of Rule
-
16(a) of the Customs and Central Excise Duties Drawback
Rules, 1995 (in short the 'Rules') and, therefore, the direction
given by the CEGAT was not in order. • ;jj
3. Learned counsel for the respondent on the other hand
F
submitted that the appellants have been adopting various dilatory
methods and have dragged on the whole matter for nearly eight
years and no interference is called for in a matter of this nature.
4. A brief reference to the factual scenario needs to be ,_
G noted. The Tribunal noted with reference to the orders passed
by the departmental authorities that the position was as follows: ...."
"The perusal of the impugned order shows that the recovery
of Rs.42,90,226/- had been ordered to be made from the
appellants as they wrongly got this amount as draw back
H on the basis of 11 shipping bills vide which the export
M/S. ALEX E;NTERPRISES & ANR. V 927
UNION OF INDIA & ORS. [DR. ARIJIT PASAYAT, J.]
J consignments valued at Rs.2,54,30,211/- were sent by A
them, but the sale proceeds of those consignments have
not been so far realiied by or on behalf of the appellants
in India, within the perio<;l allowed under the Foreign
Exchange Regulation Act. Therl?lfore they wern c:isked to
pay back the amount of the draw back un.der Section 142 B
of the Customs Act. The learned counsel has not contested
the correctness of the impugned order on merits on ~my
'-" material on record. Hfil has admitteq that the sale proqeeds
of the consignment had not been repatriated in India so
far and that the appellants had availed the drawback of
the disputed amount. Th@refgre, prima facie, we do not
c
fine any case in favour of the appellants for allowing them
total waiver of the pre deposit of the drawback amount as
well as the penalty amount.
However keeping in view the facts and circumstances of D
the case, and the financial hardship of the appellants as
pleaded by the learned counsel, we direct the appellants
to make pre deposit of the draw back amount of Rs.42
lakhs on or before 30. 7.2002. On making this deposit, the
requirement to pre deposit the balance drawback amount
and the penalty amount shall stand waived and recovery E
stayed till the disposal of the appeal. However, it is made
clear that if the terms of this stay order are not complied
with within the stipulated period, then their appeal shall be
liable to be dismissed under Section 1298 of the Act."
F
5. As noted above the time was given to deposit
Rs.42,00,000/-on or before 10.7.2002. A writ petition was filed
against the order of CEGAT i.e. Writ Petition No. 4053 of 2002.
The High Court disposed of the writ petition extending the time
• for making deposit till 30.9.2002 and directed to file compliance
before the CEGAT on 7.10.2002. On 7.10.2002 an application G
}'
for extension of time was filed before CEGAT stating that the
appellants were taking steps to file a review/recall application
of the order passed in the Writ Petition. The Review Petition is
stated to have filed on 11.10.2002. On 22.10.2002 another
application for extension of time was filed or stated to have been H
928 SUPREME COURT REPORTS (2009) 4 S.C.R.
A filed. The Review petition was dismissed as withdrawn on •t
17.12.2002.
6. It is stated by learned counsel for the appellant that liberty
was granted to move another appropriate application seeking
modification of the order dated 2.8.2002. On 20.10.2002,
B CEGAT dismissed the appeal on the ground that the order
passed by the CEGAT and the extended time granted by the
High Court to make the deposit were not complied with. A writ
petition was filed seeking restoration of the appeal which was
dismissed by the High Court on 25.3.2003. A writ petition No.
C 2151 of 2003 was filed with a prayer to set aside/quash the
entire subsequent proceedings. The same was dismissed by
the High Court on 25.3.2003. The appellants filed a review
petition which was numbered as RA No. 3890 of 2003 on the
ground that the undue hardship aspect was not considered by
0 the High Court. The same was dismissed by the High Court on
25.3.2003. SLP(C ) No. 12435 of 2003 was filed before this
court against the said order of the High Court. The same was
dismissed on 28.7.2003. On 1.8.2003 the present Civil Appeal
was filed.
E 7. The factual scenario as noted above clearly goes to
show that the appellants adopted various dilatory methods and
the present appeal is nothing but an abuse of the process of law.
8. Learned counsel for the appellant submitted that the
case has not been heard on merits, and the effect of Rule 16(a)
F of the Rules have not been considered. It is also submitted that
some time may be granted to make the deposit. Both the pleas
are without any substance. The question of applicability of Rule
16(a) could have been gone into the appeal filed before CEGAT.
That stage has not arrived at. The CEGAT was only dealing
G with the application to dispense with the requirement of pre-
deposit.
9. The conduct of the appellant disentitle them from any
relief. Therefore this appeal is dismissed as there is no
substance in the same. There shall be no order as to costs.
K.K.T. Appeal dismissed.
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