CX - Tribunal has no power to dismiss petitioner's appeal without adjudication on merits - While condoning delay and restoring appeal, Tribunal could have imposed some reasonable conditions but even that has not been done: HC
By TIOL News Service
MUMBAI, JULY 07, 2015: THE appeal filed by M/s Super Label Mfg. Co. was dismissed by the CESTAT for want of prosecution on 13.09.2010.
Consequently, an application for Restoration of the appeal was filed and this too was dismissed by the Tribunal on 29.11.2013.
This is what was observed by the Bench -
“3. The appeal filed by the applicant was dismissed by this Tribunal on 13.09.2010 for non-prosecution. It was observed by the Tribunal that the matter was listed for hearing on 9.7.2010. On the said day the learned Advocate appearing on behalf of the applicant sought adjournment. Therefore, the matter was posted for hearing on 09.08.2010. On 9.8.2010 none appeared on behalf of the applicant nor any request for adjournment has been received but again, in the interest of justice, this Tribunal adjourned the matter to 13.09.2010. On 13.9.2010 also none appeared for the applicant nor any request for adjournment received. In the application for Restoration of Appeal, they have not specified any reason as to why the applicant or their authorized representative have not appeared for the hearing. There is also no reasonable cause has been stated in the application for Restoration of Appeal. In these circumstances, the application for ROA deserves no merit hence dismissed."
Against this order, M/s Super Label Mfg. Co. have filed a Writ Petition before the Bombay High Court and submitted as below -
++ That the Tribunal has no power to dismiss the appeal for want of prosecution.
++ The Tribunal should have given an opportunity to the appellant/petitioner to satisfy it that though the appeal was belated, there is sufficient cause for the delay and that the petitioner deserves an adjudication of the appeal on merits.
++ Reliance is placed on the judgment of the Supreme Court in the case of Balaji Steel Re-Rolling Mills Vs. Commissioner of Central Excise and Customs, - 2014-TIOL-92-SC-CX-LB .
On the other hand, the counsel for the Revenue submitted that the petitioner's conduct is gross and reflects utter neglect and callousness; that the Commissioner (A) had ordered deposit of 50% of the confirmed demand and penalty and which was not complied and, therefore, the appeal before the Commissioner (A) stood dismissed for non-compliance of the condition; that further appeal was filed before the CESTAT and the Tribunal had ordered as detailed above. Inasmuch as, to such a situation as prevailing in the present case, the law laid down by the Supreme Court would not apply and as there is no error or infirmity in the impugned order the petition should be dismissed, submitted the Revenue.
The High Court observed -
"…, we are of the view that the judgment of the Hon'ble Supreme Court is clear inasmuch as the Hon'ble Supreme Court referred to Section 35C of the Central Excise Act,1944. That section deals with the orders of the Appellate Tribunal. In that section, there is no power conferred upon the Tribunal, according to the Hon'ble Supreme court, of dismissing the appeal for want of prosecution. The judgment of the Hon'ble Supreme Court construed subsection (1) of Section 35C of the Act and holds that the larger or wider power will not include the situation where an appeal can be dismissed without adjudication on merits or for want of prosecution. A reference is also made to Rule 24 of the Appellate Tribunal Rules,1946 under the Income Tax Act,1922 and equally Rule 20 of the subject Rules. Though the rule may be giving power to the Tribunal to dismiss in its discretion an appeal for default yet, construing its wording the Hon'ble Supreme Court holds that when the Act enjoins upon the Tribunal to pass order on the appeal confirming, modifying or annulling the decision or order appealed against or it may remand the matter, then, that power under the Section does not include dismissal of appeal for default or for want of prosecution. Therefore, the wording of section was held to be crucial for the purposes of rendering the decision on the issue or question before the Supreme Court.
6. Once the above judgment applies and the Tribunal has no power to dismiss the petitioner's appeal without adjudication on merits, then, it could have given an opportunity to the petitioner to argue its appeal and satisfy the Tribunal that the order of the Commissioner is required to be annulled or modified or the case must go back to him. That opportunity should have been granted by condoning the delay in filing the appeal or by restoration of the appeal. While condoning the delay and restoring the appeal, the Tribunal could have imposed some reasonable conditions but even that has not been done."
The High Court allowed the Writ Petition and while setting aside the order of the Tribunal and restoring the appeal directed the petitioner to pay costs of Rs.15,000/- to be deposited with the respondent pursuant to which the Tribunal would hear the appeal on merits.
(See 2015-TIOL-1546-HC-MUM-CX)
