Natural justice and pre-deposit compliance: dismissal without hearing was set aside, with remand for fresh consideration on merits.

Dismissal of the appeal for non-compliance with the pre-deposit requirement under Section 35F was found unsustainable because no notice of hearing was issued before final rejection and the assessee's plea of sickness before BIFR was not considered. The absence of hearing violated natural justice, and the interim stay order also showed non-application of mind to a material circumstance relevant to the stay request. The rejection order was set aside, the matter was remanded for fresh disposal on merits in accordance with law, and the stay application was directed to be reconsidered by a speaking order after hearing the party.

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Issues: Whether the dismissal of the appeal for non-compliance with the pre-deposit requirement under Section 35F of the Central Excise Act, 1944, without notice of hearing and without considering the assessee's plea of sickness before BIFR, was justified.

Analysis: The appeal was rejected for want of pre-deposit after an interim stay order had directed deposit of 40% of the duty and penalty. The record showed that no notice of hearing on the final disposal of the appeal was issued before rejection, and the objection based on violation of natural justice was not met. It was also noticed that the plea that the unit had been declared sick by BIFR was not taken into account while passing the interim stay order, indicating non-application of mind to a material circumstance relevant to the stay request.

Conclusion: The rejection order was unsustainable and was set aside. The matter was remanded to the Commissioner (Appeals) for fresh disposal of the appeal on merits in accordance with law and natural justice, and the stay application was also directed to be reconsidered by a speaking order after hearing the party.

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