2013 (9) TMI 169 - AT - Central Excise

Tribunal Remands Case for Reconsideration, Emphasizes Fair Proceedings

GARG ISPAT UDYOG LTD. Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR

The Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for reconsideration of the modification application. The ... Modification of stay order - Non-Compliance with the Stay Order - whether Commissioner (Appeals) had powers to modify the stay order passed by him - Non consideration of the said modification application results in failure of justice - Held that:- Keeping in the view the applicant had already deposited an amount of Rs. 15 lakhs - the condition of pre-deposit of balance amount of duty and penalties imposed was dispensed upon both the applicants – order set aside and matter remanded back to Commissioner (Appeals) for reconsideration of the modification application before him. Prem Nath Monga Foods & Beverages Pvt. Ltd. v. CCE [1992 (10) TMI 152 - CEGAT, NEW DELHI ] - The modification application was filed by the applicant and Commissioner (Appeals) was under a legal obligation to dispose of the said application - To reject the application and to dismiss the appeals simultaneously vide the same order does not meet the requirement of fair proceedings - Inasmuch as the applicant would come to know about the dismissal of the modification application vide the same impugned order along with the dismissal of its appeal - Even if the appellate authority deemed it fit to reject the modification application, interest of justice required him to extend the period to deposit the directed amount and to let the applicant also know about the same - In the absence of intimation about the decision on the modification of the application, the appellant cannot be expected to know about the same - As such, dismissal of the appeal for non-compliance along with rejection of the modification application violates the basic principle of natural justice. Dissenting Opinion – Member (Technical) was not in consonance of the Judgement of the Member (Judicial) therefore he delivered a Separate Judgement - Law being succinctly clear on the bar of exercise of power of review by an authority not expressly vested with such power by law and no Court can legislate on such power - In view of the majority opinion after waiving the requirement of pre-deposit for hearing the appeal filed with the Tribunal - the order-in-appeal was set aside with liberty to the appellant to comply with Stay Order issued by the Commissioner (Appeals) directing pre-deposit of Rs. 20 lakhs ordered by him within 30 days of receipt of this order for hearing of the appeal on merits by the Commissioner (Appeals) - If such pre-deposit is not made, the appeals before the Commissioner (Appeals) will stand dismissed and consequently the order-in-original will get restored. Issues Involved:1. Non-compliance with the stay order and dismissal of appeals.2. Authority of the Commissioner (Appeals) to modify the stay order.3. Requirement of issuing a show cause notice before dismissing the appeal.4. Principles of natural justice and fair proceedings.5. Pre-deposit requirement and its waiver.Detailed Analysis:1. Non-compliance with the Stay Order and Dismissal of Appeals:Duty of Rs. 40,96,119/- along with an identical penalty was confirmed against M/s. Garg Ispat Udyog Ltd., and varying penalties were imposed on other appellants. The Commissioner (Appeals) dismissed the appeals for non-compliance with a stay order requiring a pre-deposit of Rs. 20 lakhs, despite the appellants having already deposited Rs. 15 lakhs. The appeals were dismissed because the appellants did not comply with the additional deposit requirement.2. Authority of the Commissioner (Appeals) to Modify the Stay Order:The Tribunal referenced the case of Prem Nath Monga Foods & Beverages Pvt. Ltd. v. CCE, which held that the Commissioner (Appeals) has the power to modify a stay order. The non-consideration of the modification application was seen as a failure of justice. Similarly, in Premchand Agarwal & Ors. v. CC, Calcutta, the Tribunal noted that dismissing both the modification application and the appeal simultaneously without a separate order was a patent illegality.3. Requirement of Issuing a Show Cause Notice Before Dismissing the Appeal:The Tribunal emphasized that a show cause notice should be issued before dismissing an appeal for non-compliance with a stay order. This principle was upheld in multiple cases, including Classic Rubber and Allied Products, which stated that appellants should be given an opportunity to comply before their appeals are dismissed.4. Principles of Natural Justice and Fair Proceedings:The Tribunal found that dismissing the appeal for non-compliance along with rejecting the modification application violated natural justice. The Commissioner (Appeals) should have informed the appellants about the decision on the modification application and extended the period for the pre-deposit. The Tribunal noted that such simultaneous dismissal did not meet the requirements of fair proceedings.5. Pre-deposit Requirement and Its Waiver:The Tribunal decided to dispense with the condition of pre-deposit of the balance amount of duty and penalties, considering that Rs. 15 lakhs had already been deposited. The impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) for reconsideration of the modification application. The Tribunal directed that a separate order should be passed on the modification application and intimated to the appellants accordingly.Separate Judgment:A separate judgment was recorded by a member who disagreed with the Tribunal's decision. This member argued that the Commissioner (Appeals) was justified in dismissing the appeal for non-compliance with the stay order. The member emphasized that there are no enacted legal provisions for modifying a stay order and that allowing such modifications could lead to abuse of the process. The member concluded that the appellant should make the pre-deposit ordered by the Commissioner (Appeals) to get a hearing.Majority Order:The majority opinion waived the requirement of pre-deposit for hearing the appeal filed with the Tribunal. The impugned order-in-appeal was set aside, allowing the appellant to comply with the stay order within 30 days for a hearing on merits by the Commissioner (Appeals). If the pre-deposit is not made, the appeals before the Commissioner (Appeals) will stand dismissed, and the order-in-original will be restored.