2019 (6) TMI 122 - HC - Central Excise

High Court overturns CESTAT decision due to lack of foundation and incomplete analysis.

The Commissioner of CGST & Central Excise, Mumbai East Commissionerate Versus M/s. DHL Logistics Pvt. Ltd.

The High Court allowed the appeal challenging the CESTAT order, finding that the Tribunal's decision lacked proper foundation and failed to address key ... Principles of Natural Justice - Whether in the facts and circumstances of the case and in law was the Tribunal justified in allowing the appeal of the respondent in absence of any reasons to support its conclusion? - HELD THAT:- There is no discussion whatsoever about the respective contentions raised by the parties. It concludes the order of adjudication is bad without having tested the same on the basis of the submissions of the parties. Thus, the impugned order of the Tribunal is in breach of principles of natural justice. The substantial question of law is answered in the affirmative that is in favour of the appellant-revenue and against the respondent-assessee. Issues:Challenge to CESTAT order under section 35G of the Central Excise Act, 1944 based on the substantial question of law regarding the justification of allowing the appeal in absence of reasons to support the conclusion.Analysis:The appeal before the High Court challenged the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the grounds of a substantial question of law. The specific question raised was whether the Tribunal was justified in allowing the respondent's appeal without providing reasons to support its conclusion. The High Court admitted the appeal and proceeded to address the issue at hand.Upon perusal of the impugned order, the High Court noted that the Tribunal had allowed the appeal without a proper foundation. The Tribunal's decision was based on the absence of material facts and evidence in the show cause notice, which is considered the foundation of adjudication as established by various Supreme Court judgments. The High Court pointed out that the Tribunal failed to discuss the contentions raised by the parties and concluded that the order of adjudication was flawed without proper consideration of the submissions. This lack of discussion and testing of arguments amounted to a breach of principles of natural justice.Consequently, the High Court held in favor of the appellant-revenue and against the respondent-assessee. The substantial question of law was answered affirmatively, leading to the setting aside of the impugned order dated 31st August 2017. The Appeal was restored to the Tribunal for fresh consideration and a new order to be passed in compliance with the principles of natural justice. The appeal was disposed of accordingly, emphasizing the importance of due process and fair consideration of arguments in legal proceedings.