CX - Dismissal of appeal on sole ground that adjudication of lis involving minor demand would not be productive is failure to exercise jurisdiction: HC
By TIOL News Service
CHENNAI, DEC 07, 2017: THE CESTAT, Chennai passed the following Final order dated 3/1/2017-
"Appeal pertains to duty demand of Rs.7,42,297/-. We do not consider it productive in this appeal to invest time by the Tribunal while there is huge pendency involving crores of rupees of Revenue. Therefore, appeal with a very minor demand of duty levied is dismissed."
The aforesaid order is assailed on the following substantial questions of law:-
a. Whether the second respondent is right in depriving the appellant the statutory right as provided under Section 35 (c) of the Central Excise Act, 1944?
b. Whether the second respondent is right in dismissing the appeal filed by the appellant by issuing an order mentioning that they do not consider it productive to invest time by the Tribunal while there is huge pendency involving crores of rupees and revenue and therefore, this appeal with minor demand of duty levied?
The appellant invited the attention of the Court to its decision in Roots Multiclean Ltd. = 2016-TIOL-324-HC-MAD-CX .
The High Court noted that on more than one occasion, the Supreme Court has held that reasons are the heartbeat of any decision and dismissal of the appeal without adverting to the facts, grounds of appeal is not appreciated [M/s.Steel Authority of India Ltd., v. STO, Rourkela-I Circle & Ors. = 2008-TIOL-133-SC-CT, Kranti Associates Private Limited and another vs Masood Ahamed Khan and Others) (2010) 9 SCC 496 relied upon].
The High Court further observed -
"9. Dismissal of the appeal, on the sole ground that there is a huge pendency involving crores of rupees of revenue and adjudication of lis involving a minor demand of duty of Rs.7,42,297/- would not be productive, in our opinion is a failure to exercise the jurisdiction conferred on CESTAT, Madras, both on facts and law. In terms of Section 35B of the Central Excise Act, the appellant is certainly an aggrieved person by the orders impugned before CESTAT, Madras."
The Civil Miscellaneous appeal was allowed by setting aside the Final order of the CESTAT. Substantial questions of law were answered in favour of the assessee.
Noting that the appeal was filed by the assessee in the year 2007, the Tribunal was directed to dispose of the same expeditiously within a period of two months.