2006 (1) TMI 14 - HC - Central Excise

High Court overturns Tribunal's orders, emphasizes fair hearing, and grants stay applications and appeals

The High Court intervened due to procedural lapses by the Tribunal, quashing its orders and reviving stay applications and appeals. The Tribunal's failure ... Central Excise – Plea to Appellate Tribunal – Appellants appeal dismissed for non-cooperation of stay order – Litigation is costly matter Issues Involved:1. Non-service of hearing notice to the petitioners.2. Dismissal of stay applications for non-prosecution.3. Dismissal of appeals for non-compliance with the stay order.4. Violation of Rule 18 of CESTAT (Procedure) Rules, 1982.5. Tribunal's failure to ensure proper and reasonable hearing.6. Tribunal's casual and negligent approach.7. Need for intervention by the High Court in exercising its extraordinary jurisdiction.Detailed Analysis:1. Non-service of hearing notice to the petitioners:The petitioners claimed they were not served with a notice of hearing for the stay applications fixed on 17-8-2005. They only became aware of the order when their representative personally inquired on 29-8-2005. The Tribunal's failure to notify the petitioners violated Rule 18 of the CESTAT (Procedure) Rules, 1982, which mandates the issuance and service of individual notices to parties. This lack of notice deprived the petitioners of an opportunity for a proper and reasonable hearing.2. Dismissal of stay applications for non-prosecution:The Tribunal dismissed the stay applications on 17-8-2005 due to non-prosecution, directing the petitioners to deposit the full duty amount by 31-8-2005. However, the order was signed by the Member (Technical) only on 24-8-2005 and dispatched on 31-8-2005, making it impossible for the petitioners to comply by the given date. This sequence of events demonstrated a lack of application of mind and a callous attitude by the Tribunal.3. Dismissal of appeals for non-compliance with the stay order:On 1-9-2005, the Tribunal dismissed the appeals for non-compliance with the stay order dated 17-8-2005. The petitioners had filed an application on 30-8-2005 seeking modification of the stay order, which was initially accepted but then returned to be presented before the Bench. Despite presenting the application before the Bench, the Tribunal recorded non-compliance and dismissed the appeals, further compounding the procedural unfairness.4. Violation of Rule 18 of CESTAT (Procedure) Rules, 1982:The Tribunal's actions violated Rule 18 of the CESTAT (Procedure) Rules, 1982, which requires notifying parties of the date and place of hearing and ensuring adequate notice to allow proper representation. The High Court cited the case of Sanghani Bright Steel v. Union of India, emphasizing the necessity of adhering to principles of natural justice and ensuring proper notice to parties.5. Tribunal's failure to ensure proper and reasonable hearing:The Tribunal failed to ensure a proper and reasonable hearing for the petitioners. The High Court highlighted that the Tribunal, being a quasi-judicial body, must function in accordance with law and principles of natural justice. The Tribunal's dismissal of appeals without verifying the petitioners' claim of non-receipt of hearing notice was a dereliction of its duty to dispense justice.6. Tribunal's casual and negligent approach:The Tribunal's approach was characterized as casual and negligent. The High Court criticized the Tribunal for either being unaware of its duties or adopting a laid-back attitude while discharging its statutory responsibilities. The Tribunal's failure to provide a copy of the order to the petitioners' representative on 29-8-2005 and its unrealistic expectation of compliance by 31-8-2005 demonstrated gross negligence.7. Need for intervention by the High Court in exercising its extraordinary jurisdiction:The High Court found it necessary to intervene in exercising its extraordinary jurisdiction due to the gross procedural lapses and denial of natural justice by the Tribunal. The impugned orders of the Tribunal were quashed and set aside. The stay applications and appeals were revived and restored to the Tribunal's file, with directions to ensure proper and reasonable opportunity of hearing for the petitioners.Conclusion:The High Court quashed the impugned orders of the Tribunal dated 17-8-2005 and 1-9-2005, revived the stay applications and appeals, and directed the Tribunal to grant a proper and reasonable hearing to the petitioners. The Court also directed the Registry to forward a copy of the order to the President of the Tribunal to address the prevailing situation. The rule was made absolute, and the petition was disposed of without any order as to costs.