2016 (10) TMI 671 - HC - Central Excise

High Court overturns Tribunal's dismissal of appeal for non-compliance, stresses need for fair evaluation before dismissal

The High Court set aside the Customs, Excise & Service Tax Appellate Tribunal's order dismissing the appellant's appeal for non-compliance with an ... Contravention of Rule 3(5) read with Section 3(4)(c) of Cenvat Credit Rules, 2004 - removal of goods without reversal of CENVAT credit - demand of excise duty - imposition of penalties in terms of provisions of Rule 15 of the Rules of 2004 read with Section 78 of the FA, 1994 - appeal preferred by the appellant and was directed to discharge the assessed liability pursuant to the adjudication order dated 30.12.10, confirmed by the appellate order dated 12/14.12.12, within four weeks - appellant did not deposit the assessed amount in compliance of the order dated 9.9.13 passed by the Appellate Tribunal and therefore, the appeal preferred was dismissed for default in compliance of the order dated 9.9.13, ignoring that the application preferred by the appellant for recalling/modification of order dated 9.9.13 was pending consideration - Whether the Appellate Tribunal was justified in dismissing the appeal preferred by the assessee for alleged non-compliance of order dated 9.9.13, without considering the application preferred by the assessee for recalling/modification of the said order, rejecting the stay petition preferred for non-prosecution? Held that: - the appellant having preferred the application as aforesaid, the Appellate Tribunal was reasonably expected to consider the said application first and could not have dismissed the appeal straight away for non compliance of the order directing pre-deposit of the assessed liability. A bare perusal of the order impugned reveals that the factum of pendency of the application preferred by the appellant for recalling/modification of the order dated 9.9.13 was brought to the notice of the Appellate Tribunal yet, ignoring the same, the Appellate Tribunal proceeded to dismiss the appeal. The order impugned passed by the Appellate Tribunal dismissing the appeal for non compliance of the order directing pre-deposit of the assessed liability without deciding the application preferred by the appellant as aforesaid, is not justified and deserves to be set aside - appeal allowed - matter remitted to the Appellate Tribunal for consideration afresh. Issues:Appeal against dismissal by Appellate Tribunal for non-compliance of order. Consideration of application for recalling/modification of order.Analysis:The appeal was directed against an order passed by the Customs, Excise & Service Tax Appellate Tribunal, where the appellant's appeal against an order by the Commissioner of Central Excise was dismissed. The appellant had removed goods without reversing CENVAT credit, leading to a penalty imposed by the Additional Commissioner. The appeal was dismissed for non-compliance with the order to discharge the assessed liability. The appellant's subsequent application for recalling/modification of the order was pending consideration. The High Court considered whether the Tribunal was justified in dismissing the appeal without considering the pending application. The Court noted the appellant's efforts to comply and the pendency of the application. It was observed that the Tribunal should have considered the application before dismissing the appeal for non-compliance. The Court found the dismissal unjustified and set aside the Tribunal's order, remitting the matter for fresh consideration.The key issue before the Court was whether the Appellate Tribunal was justified in dismissing the appeal for non-compliance without considering the appellant's pending application for recalling/modification of the order. The Court emphasized the importance of the appellant's efforts to comply and the pendency of the application. It was held that the Tribunal should have considered the application before dismissing the appeal. The Court found the dismissal unwarranted and set aside the Tribunal's order, remitting the matter for fresh consideration.The Court considered the appellant's submission that the Tribunal erred in rejecting the appeal for alleged default in compliance without considering the pending application for recalling the order. The respondents did not dispute the pendency of the application but argued that non-compliance justified the dismissal. The Court analyzed the submissions and the material on record. It noted the dismissal of the stay petition and the direction to pre-deposit the liability. The Court highlighted the appellant's application for recalling/modification of the order and found the Tribunal should have considered it before dismissing the appeal. The Court concluded that the dismissal was unjustified and set aside the Tribunal's order.In the judgment, the Court highlighted the appellant's contention that the Tribunal erred in rejecting the appeal for non-compliance without considering the pending application for recalling/modification of the order. The Court noted the rival submissions and the material on record. It emphasized the appellant's efforts to comply and the pendency of the application. The Court found that the Tribunal should have considered the application before dismissing the appeal. Consequently, the Court allowed the appeal, set aside the Tribunal's order, and remitted the matter for fresh consideration in accordance with the law.