By TIOL News Service

MUMBAI, JULY 30, 2018: IN the matter of alleged clandestine manufacture and removal of final products an order was passed by the adjudicating authority and against which the assessee had filed an appeal before the CESTAT.

The appellant had argued before the CESTAT that it was deprived of an opportunity of defending the show cause notice in the absence of the copies of the documents relied upon by the Department/Revenue, not having been supplied to them. The Revenue, however, submitted that all the documents which are relied upon were supplied and, therefore, there is no need to supply any documents afresh when the appeal is pending since 2006.

The CESTAT had noted these contentions and passed an order directing the appellant to produce the bank records etc. before the adjudicating Commissioner for examination; the Revenue to produce the ‘file containing loose papers' for examination by appellant and for submission of a report to the Tribunal by 31.07.2017.

Consequently, when the matter came up for hearing, the CESTAT observed -

"Appellant says that it has not made application to the learned adjudicating Commissioner to fix a date for production of records before him for his examination as was directed by order dated 30th May 2017. That has obstructed the process of justice and handicapped the authority to send his report today.

2. In view of the above defiance of order of Tribunal by the appellant who has obstructed the process of justice, notice is hereby issued to it to show cause on 10.08.2017 as to the reason why the interim order passed on 7.7.2006 staying realization of demand to the extent stated in the order shall not be vacated and its appeals dismissed on that day. So also appellant is directed to explain the reason why contempt shall not be drawn against it for obstruction to the process of justice and such explanation with the order of Tribunal forwarded to the Hon'ble High Court at Bombay for appropriate order."

3. Appellant is also directed to file an affidavit by 10th August 2017 stating the reason why it has not made application to the adjudicating Commissioner for fixation of date of hearing and examination of its records as stated in the order of Tribunal passed on 30.5.2017. Copy of such affidavit be also served on Revenue by 08th August 2017.

4. Call the matter on 10th August 2017."

Aggrieved by this order, the petitioner is before the Bombay High Court.

After considering the submissions made, the High Court inter alia observed -

+ We find that the Tribunal in the peculiar facts and circumstances would have been well advised to dispose of the appeal on merits and finally. With great difficulties and obstacles, parties get an opportunity to argue old appeals and the Tribunal, therefore, should not pass any orders which would delay the proceedings further.

+ Public interest suffers adversely if any tentative and prima facie view is expressed, like in the present manner, and it delays the final hearing of the appeal and thereafter the passing of the orders. The available material should have been taken into account to dispose of the appeal.

Accordingly, the High Court directed the Tribunal to pass final orders in the appeal and also held that the latter order should not be given effect by the Tribunal till the final orders are passed.

While disposing of the Writ Petition, the High Court reiterated -

++ The Tribunal should be well aware that in the event there is any obstruction to the course of justice or the Tribunal is not rendered the necessary cooperation and assistance by parties in deciding appeals, it can very well report this fact to this Court by specifically mentioning it in its final orders.

++ It is, thereafter, for this Court to take appropriate action and that much trust and confidence must be reposed by the Tribunal in a higher Court. It is in these circumstances that latter order be kept in abeyance till the decision of the appeal.

(See 2018-TIOL-1479-HC-MUM-CX)