REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 947 OF 2004

M/s. Alex Enterprises & Anr. ..Appellants

Versus

Union of India & Ors.  ..Respondents

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Challenge in this appeal is to the judgment of the 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/-

1

confirmed  by  the  Commissioner  of  Customs.   The  High  Court  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 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.

3. Learned counsel for the respondent on the other hand 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  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

2

the appellants as they wrongly got this amount as draw back on

the  basis  of  11  shipping  bills  vide  which  the  export

consignments  valued  at  Rs.2,54,30,211/-  were  sent  by them,

but the sale proceeds of those consignments have not been so

far realized by or on behalf of the appellants in India, within

the  period  allowed  under  the  Foreign  Exchange  Regulation

Act. Therefore they were asked to pay back the amount of the

draw back under Section 142 of the Customs Act.  The learned

counsel  has  not  contested  the  correctness  of  the  impugned

order on merits  on any material  on record.  He has admitted

that  the  sale  proceeds  of  the  consignment   had  not  been

repatriated in India so far and that the appellants had availed

the drawback of the disputed amount.  Therefore, prima facie,

we do not 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

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

3

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 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 129B

of the Act.”

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 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 filed.  The Review petition was dismissed as

withdrawn on 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

4

order dated 2.8.2002.  On 20.10.2002, 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. 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 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.  

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) of the Rules have not been

5

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  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.

………………………………….J. (Dr. ARIJIT PASAYAT)

………………………………….J. (ASOK KUMAR GANGULY)

New Delhi, March 05, 2009

6