2015 (5) TMI 458 - HC - Central Excise

High Court overturns Tribunal's decision due to lack of natural justice, grants appellant new hearing opportunity.

WELSPUN MAXSTEEL LTD. Versus COMMISSIONER OF CENTRAL EXCISE, RAIGAD

The High Court reviewed an order by the Customs, Excise and Service Tax Appellate Tribunal granting waiver of pre-deposit and stay of recovery in the ... Waiver of pre deposit - Opportunity of hearing not granted - Held that:- Without laying down a general rule or a precedent but only in the facts and circumstances of the present case that we can adopt such a course where prima facie nexus would have to be established with the service of bringing in raw materials and for purposes of production of goods in the appellant's factory and their ultimate removal and whether on such an activity can credit be claimed and styling the same as input services are matters and given the effect of the rule which has been reproduced in the Tribunal's order would enable us to set aside the impugned order and restore the applications to the file of the Tribunal. The Tribunal shall give an opportunity to both sides to raise their contentions and thereafter pass a fresh order. While passing the same the Tribunal should not influence itself by its earlier conclusions or observations. - Matter remanded back - Decided in favour of assessee. Issues:Application for stay before the Customs, Excise and Service Tax Appellate Tribunal - Absence of appellant and advocate during the hearing - Granting of waiver of pre-deposit and stay of recovery - Allegations of violation of principles of natural justice - Admittance of substantial question of law - Review of impugned order by the High Court.Analysis:The appellant assessee filed an application for stay before the Customs, Excise and Service Tax Appellate Tribunal seeking waiver of the pre-deposit condition and stay of recovery pending the disposal of the statutory appeal. However, during the hearing on 7th April, 2014, both the appellant and their advocate were absent, leading the Tribunal to decide the application on merits in their absence. The appellant argued that they could have raised several issues before the Tribunal, highlighting past instances where the Tribunal had waived the pre-deposit condition. On the other hand, the Revenue contended that it was the appellant's responsibility to remain present and seek relief as per the application made, and the Tribunal was not obligated to grant further adjournments. The High Court noted the substantial question of law raised regarding the violation of principles of natural justice and proceeded to review the impugned order.Upon perusal of the impugned order and considering the arguments presented by both parties, the High Court found that the Tribunal's decision to pass a detailed order in the absence of the appellant and their advocate warranted a fresh opportunity for the appellant to reargue the application. The Court emphasized the importance of natural justice and fairness in the proceedings, leading to the setting aside of the Tribunal's order to provide the appellant with a chance to present their case effectively. The High Court refrained from establishing a general rule but tailored its decision to the specific circumstances of the case, emphasizing the need for a fair hearing and a balanced approach.To ensure procedural fairness and avoid further complaints, the High Court fixed a date for the appearance of both parties and their advocate before the Tribunal, directing the Tribunal to reconsider the applications and pass a fresh order. The Court emphasized that no additional opportunities would be granted, concluding the Central Excise Appeal in the given terms without imposing any costs. The judgment highlighted the significance of affording parties a fair chance to present their arguments and the importance of upholding principles of natural justice in legal proceedings.