Tribunal must decide appeals on merits, not dismiss for non-prosecution; restoration refusal was unsustainable.

The Tribunal under Section 35C of the Central Excise Act, 1944 is required to decide an appeal on merits and cannot short-circuit adjudication by dismissing it for non-prosecution. Where the Tribunal dismissed the appeal for default and then refused restoration, that approach was unsustainable. The impugned order was set aside and the appeal was allowed in favour of the assessee.

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Issues: Whether the Tribunal was justified in dismissing the appeal for non-prosecution and in rejecting the restoration application without deciding the appeal on merits.

Analysis: The appeal arose under Section 35G of the Central Excise Act, 1944. The Court followed the settled position that the Tribunal, under the scheme of Section 35C of the Central Excise Act, 1944, is required to dispose of an appeal on merits and does not have power to short-circuit adjudication by dismissing an appeal for default or want of prosecution. Since the Tribunal had dismissed the appeal for non-prosecution and also refused restoration, the impugned order could not stand.

Conclusion: The dismissal for non-prosecution and the refusal to restore the appeal were held unsustainable, and the appeal was allowed in favour of the assessee.

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