1996 (8) TMI 110 - SC - Central Excise

Ex parte orders set aside when respondent's absence is not their fault; recall under Rule 41 and inherent power

SC held that where a respondent could not appear for no fault of his own, the ends of justice require setting aside an ex parte order. CEGAT possesses ... Ex party orders - denial of refund claim - appellant seeking to recall the order on the grounds of Rule 41 - Held that:- If, in a given case, it is established that the respondent was unable to appear before it for no fault of his own, the ends of justice would clearly require that the ex parte order against him should be set aside. Not to do so on the ground of lack of power would be manifest injustice. Quite apart from the inherent power that every tribunal and court constituted to do justice has in this respect, CEGAT is clothed with express power under Rule 41 to make such order as is necessary to secure the ends of justice. CEGAT has, therefore, the power to set aside an order passed ex parte against the respondent before it if it is found that the respondent had, for sufficient cause, been unable to appear. It is for CEGAT to consider in every such case whether the respondent who applies for recall of the ex parte order against him had sufficient cause for remaining absent when it was passed and, if it is established to the satisfaction of CEGAT that there was sufficient cause, CEGAT must set aside the ex parte order, restore the appeal to its file and hear it afresh on merits. On the facts of the present case, we think it proper to allow the appellants' application to CEGAT for setting aside the ex parte order against it ourselves. Appeal allowed. Issues:- Appeal against the ex parte order passed by CEGAT.- Interpretation of Rule 41 of CEGAT (Procedure) Rules, 1982.- Comparison with powers granted to other tribunals under different statutes.- Consideration of the ends of justice and the power of CEGAT to recall ex parte orders.- Application of Rule 41 to secure the ends of justice.- Setting aside the ex parte order and hearing the appeal on merits.Analysis:The judgment revolves around an appeal against an ex parte order passed by CEGAT. The appellant's refund claim was initially rejected by the Assistant Collector of Central Excise, but the appeal was allowed by the Collector (Customs). However, the respondent, the Collector of Central Excise, filed an appeal before CEGAT, which was decided ex parte against the appellant. The appellant sought to recall the order on the grounds of Rule 41 of CEGAT (Procedure) Rules, 1982. The respondent argued that CEGAT lacked the power to recall or set aside an order passed on merits in the absence of the respondent, citing Rules 20 and 21. CEGAT deliberated on the rules and concluded that it had a duty to decide the appeal on merits based on the material on record, even in the absence of the respondent. The judgment highlighted that recalling the order passed on merits would exceed the tribunal's legal authority.The appellant contended that Rule 41 allowed the recall of an order passed on the merits if necessary to secure the ends of justice. The argument was supported by referencing previous judgments related to the powers of other tribunals under different statutes. The judgment cited cases where tribunals had the authority to set aside ex parte awards to prevent injustice. It emphasized that Rule 41 granted CEGAT wide powers to ensure justice and prevent abuse of process. The comparison with powers granted to other tribunals underscored the principle that an express grant of statutory power carries implied authority to use reasonable means to achieve justice.The judgment clarified that Rule 21 of CEGAT (Procedure) Rules did not explicitly address setting aside an ex parte order, but this did not preclude CEGAT from doing so. It affirmed that CEGAT had the power under Rule 41 to set aside an ex parte order if the respondent had a valid reason for their absence. The judgment emphasized that securing the ends of justice was paramount, and not setting aside an ex parte order due to perceived lack of power would result in manifest injustice. CEGAT was vested with the authority to set aside an ex parte order if sufficient cause for the respondent's absence was established.In conclusion, the judgment allowed the appellant's application to set aside the ex parte order and directed CEGAT to restore the appeal to its file for a fresh hearing on merits. The decision highlighted the importance of considering the circumstances of each case to ensure justice and emphasized CEGAT's power under Rule 41 to secure the ends of justice effectively.