2012 (4) TMI 514 - AT - Central Excise

Commissioner's Error Overturned: Tribunal Emphasizes Legal Principles

The Tribunal found that the Commissioner (Appeals) failed to apply proper judgment and disregarded fundamental legal principles. Consequently, the ... waiver of pre deposit - Enhancement of penalty - Held that:- Commissioner (Appeals) who has neither looked into order passed by him two months back nor also was aware of the powers entrusted on an Appellate Authority envisaged by Section 35A of Central Excise Act, 1944. Proviso to sub-section (3) to Section 35A mandates that an order enhancing any penalty shall not be passed unless an appellant is given reasonable opportunity to show cause why such an order shall not be passed. It is elementary principle of jurisprudence that no one can be put into a situation adverse to the earlier situation without sanction of law. But such a golden principle was given go bye by an Appellate Authority who has been entrusted with power of redressal of grievance. It is surprising how authority has acted to the detriment of interest to justice - Decided in favour of assessee. Issues: Non-application of mind by the Commissioner (Appeals) leading to unwarranted penalty imposition.Analysis:The appellant raised concerns regarding the actions of the Commissioner (Appeals) in two instances. Firstly, the Commissioner waived a penalty in an order issued on 1-8-2011, but later imposed a penalty in a separate order dated 5-10-2011 without considering the previous decision. The appellant argued that this inconsistent behavior was prejudicial to the interest of justice. The appellant also highlighted that the Commissioner's actions did not align with the provisions of Section 35A of the Central Excise Act, 1944, which require giving a reasonable opportunity to show cause before enhancing any penalty. The Tribunal noted the lack of application of mind by the Commissioner (Appeals) and criticized the disregard for fundamental principles of jurisprudence. The Tribunal emphasized that no one should face adverse consequences without legal sanction and expressed surprise at the authority's actions going against the interest of justice.The Tribunal, after hearing both sides and examining the records, concluded that the appeal presented a unique situation showcasing the failure of the Commissioner (Appeals) to apply proper judgment. The Tribunal found that the Commissioner's actions were not in line with the statutory provisions and principles of natural justice. As a result, the Tribunal decided to waive the pre-deposit and set aside the impugned order imposing the penalty. The Tribunal directed the concerned authority to take appropriate measures under the law, emphasizing the importance of upholding legal standards and ensuring justice in the decision-making process.