1997 (4) TMI 144 - AT - Central Excise

Summary

Issues:
1. Compliance with guarantee requirement as per High Court order.
2. Failure to furnish necessary guarantee.
3. Management's response to court directions.
4. Dismissal of appeal due to non-compliance.

Comprehensive Analysis:

The judgment pertains to a case where the appellants were directed by the Tribunal to pre-deposit a sum under Section 35F of the Central Excise Act. The Hon'ble High Court of Karnataka had observed that a sick industrial company, though entitled to dispensation from pre-deposit, must provide collateral security against disputed demands. The High Court emphasized that the security should not be in the form of a bank guarantee or cash.

Initially, the matter was adjourned to allow the appellants to determine the nature of the guarantee required by the High Court. However, on subsequent hearings, the appellants failed to provide the necessary guarantee. The appellants claimed severe financial problems and stated that their activities were suspended, preventing access to records. The Tribunal noted that the company was not dissolved, and there was still management in place. Despite directions from the High Court and the Tribunal, the appellants did not comply with the guarantee requirement.

The Tribunal expressed disappointment at the management's lackadaisical approach towards the court directions. As the appellants failed to adhere to the High Court's order and Section 35F requirements, the appeal was dismissed. The Miscellaneous application was also rejected. However, the appellants were granted the opportunity to revive the appeal within a reasonable time upon compliance with the High Court's order. The Tribunal emphasized that further leniency could not be granted due to the appellants' non-compliance with the court directives.

In conclusion, the judgment highlights the importance of complying with court orders and providing necessary guarantees as directed, especially in cases involving financial obligations under the Central Excise Act. The dismissal of the appeal underscores the significance of adherence to legal requirements and court instructions in legal proceedings.