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Judgment
Debangsu Basak, J.—The petitioner has challenged an order dated July 12, 2006 passed by the Customs, Excise Service Tax Appellate Tribunal.
During the pendency of the writ petition, the petitioner has sought to make a debit entry in the ledger of sum of Rs. 7 lakhs. Learned advocate for the petitioner claims that amount of Rs. 7 lakhs should be treated as a deposit in terms of the earlier order of the Appellate Tribunal and the appeal should be directed to be heard.
The Customs authorities are represented.
The appeal was preferred by the petitioner from an order of adjudication. In the appeal, the petitioner was directed to deposit an entire amount of duty and penalty by the order dated May 24, 2006. The order dated May 24, 2006 passed by the appellate authority is not under challenge.
The petitioner did not comply with the order dated April 24, 2006. On the stay application and the appeal being taken up for consideration, the appellate authority have found on July 11, 2006 that, the petitioner did not comply with the direction for deposit. It had, therefore, proceeded to dismiss the appeal for non-compliance of the provisions of Section 35F of the Central Excise Act.
The subsequent claim of deposit by way of a debit entry in a ledger, in my mind, cannot be construed as a sufficient deposit of security against an amount found due and payable by an adjudicating authority. The debit entry had been made on the basis of an assumption that the petitioner would be entitled to a credit in respect of certain goods. That credit may or may not ultimately fructify. Without that credit actually fructifying, the petitioner cannot claim such credit for the purpose of making a debit entry in discharge of its liability. First a credit has to become an asset of the petitioner for the same being used for the purpose of discharge a liability of the petitioner. By making a debit entry, essentially, the petitioner is trying to utilise public money to secure the claim of the authorities.
The petitioner had preferred an appeal from that order of adjudication. The appellate authority on April 24, 2006 had directed the pre-deposit to be made. The order dated May 24, 2006 is not under challenge. Such order has to be read to mean that the petitioner must make a cash deposit as security.
In such circumstances, I find that the debit entry made in the ledger is inadequate. The petitioner was offered time to put in the sum of Rs. 7 lakhs in cash. Learned advocate for the petitioner on instructions has submitted that the petitioner is unable to do so.
In such circumstances, I find no merit in the present petition. WP No. 595 of 2007 is dismissed. No order as to costs.