Commissioner (Appeals) has no power to review order of pre-deposit, but if such order is erroneous, Tribunal is required to remand matter to Appellate Commissioner after passing appropriate order as to pre-deposit as laid down by Tribunal itself in Girnar Transformers case - Matter remanded: HC
By TIOL News Service
CHENNAI, AUG 19, 2014: THE appellant filed an appeal with Commissioner (Appeals) who ordered a pre-deposit of 50% of the duty demanded. The appellant, made a request to the Appellate Commissioner to reconsider the order. The Appellate Commissioner took up the said request letter as a review application and proceeded to dispose of the appeal in the following manner:
(i) The assessee had no case on merits;
(ii) There is no power to review/reconsider the order directing pre- deposit; and
(iii) The assessee had not complied with the direction of the Appellate Commissioner in his order dated 24.2.12 and, therefore, the appeal is liable to be rejected summarily for non-compliance.
Aggrieved by the above said order of the Appellate Commissioner, the assessee approached the Appellate Tribunal contending that -
(i) The Appellate Commissioner ought to have reviewed the order of waiver of pre-deposit on prima facie case;
(ii) The appeal ought not have been disposed of on merits when review application is pending; and
(iii) Rejection of the appeal for non-compliance is bad in view of the prima facie case was made out for waiver of pre-deposit.
The Tribunal though held that the Commissioner (Appeals) ought not to have recorded all analysis and conclusion on merits of the appeal and, therefore, to that extent, the order of the Commissioner (Appeals) is bad, insofar as the failure to pre-deposit is concerned, the Appellate Tribunal upheld the order holding that for non-compliance, the Commissioner (Appeals) was justified in dismissing the appeal.
The assessee filed appeal before the High Court against the said order of the Tribunal.
After hearing both sides, the High Court held:
On the first question of law raised by the appellant as to whether the Commissioner (Appeals) has the power to review his own order of pre-deposit, we find that there is no provision of law under the Central Excise Act, which gives power to the Commissioner (Appeals) to review his order. But such a power is available to the Tribunal under Section 35-C (2) of the Act to rectify any mistake apparent on the record. Therefore, we find that the Tribunal was justified in rejecting the plea of the appellant that the Commissioner (Appeals) ought to have reviewed the order. When there is no power under the statute, the Commissioner (Appeals) has no authority to entertain the application for review of the order. Accordingly, the first substantial question of law is answered against the assessee.
Insofar as the Tribunal dismissing the appeal holding that the Commissioner (Appeals) was justified in rejecting the appeal for non-compliance without endeavouring to look into the issue of prima facie case, balance of convenience, irreparable loss and financial hardship, we find that the very same Tribunal in M/s. Girnar Transformers Pvt. Ltd. - Vs CCE, Kanpur 2014-TIOL-305-CESTAT-DEL, has formulated certain principles with regard to the issue of waiver of pre-deposit and the scope and ambit of the power of the Appellate Commissioner vis -a- vis the Tribunal for considering waiver of pre-deposit.
In para-30 (g) of the abovesaid decision, the Tribunal has clearly held that in an appeal against the final order of the Appellate Commissioner (dismissing the appeal for failure to pre-deposit), the Tribunal will not adjudicate upon the merits of the appeal, but if the order of pre-deposit passed by the Commissioner (Appeals) in the given facts and circumstances of the case is erroneous, the Tribunal is required to set aside the order of the Appellate Authority and remand the matter to the Appellate Commissioner for de novo consideration after passing an appropriate order as to pre-deposit. We find that this exercise has not been done by the Tribunal in the present case and it has summarily upheld that the rejection of the appeal for failure or pre-deposit is impeccable and, therefore, we have no hesitation to hold that the Tribunal should have considered the pre-deposit issue perforce and to that extent the order has been rightly put to test by the appellant before this Court.
In the result, the High Court allowed the appeal and remitted the matter back to the Tribunal.
(See 2014-TIOL-1393-HC-MAD-ST)
