2006 (6) TMI 123 - HC - Central Excise

High Court restores appeal, emphasizes compliance with Tribunal, directs costs, and warns of legal action.

The High Court allowed the writ petition, setting aside the Tribunal's order dismissing the appeal for non-prosecution. The Court granted restoration of ... Restoration of appeal - dismissal for non-prosecution - compliance with pre-deposit and bank guarantee directions - service of notice - delay and condonation of delay - discretion to recall tribunal order - duty of departmental representative to place correct factsDismissal for non-prosecution - compliance with pre-deposit and bank guarantee directions - service of notice - duty of departmental representative to place correct facts - Validity of dismissal of the appeal for non-prosecution and correctness of refusal to restore the appeal on the ground of non-compliance with Tribunal's directions and non-appearance - HELD THAT: - The Court found on the materials that the petitioner had complied with the Tribunal's directions by depositing the pre-deposit and by furnishing a bank guarantee within the stipulated time, and had even extended the bank guarantee thereafter. The Tribunal's conclusion of non-compliance was therefore incorrect. Further, there was no adequate proof that notice of hearing had been served upon the petitioner at the address for service; the petitioner had communicated change of address and his counsel had died, creating a communication gap. The departmental representative before the Tribunal ought to have pointed out compliance to avoid injustice. In the totality of these circumstances the dismissal for non-prosecution was not justified and the Tribunal's refusal to restore the appeal was unsustainable. [Paras 8]Dismissal for non-prosecution set aside; appeal to be restored as dismissal was not justified.Restoration of appeal - delay and condonation of delay - discretion to recall tribunal order - Whether the delay in filing the restoration application warranted refusal of restoration and whether restoration should be allowed despite the delay - HELD THAT: - Although the application for restoration was filed after several years, the Court held that the surrounding circumstances-bona fide belief that the appeal was pending (as evidenced by renewal of the bank guarantee and department's communications), transfer of the appeal from Bombay to Delhi, death of the petitioner's counsel, change of address and non-service of notices-sufficiently explained and justified the delay. Having regard to these factors, the Court exercised its discretion in favour of restoration and directed that the appeal be restored subject to conditions. [Paras 9]Delay excused; restoration allowed subject to conditions (costs, extension of bank guarantee and appearance before Tribunal).Final Conclusion: Writ petition allowed; the Tribunal's order refusing restoration set aside and the petitioner's appeal restored on conditions (payment of costs, continuation of bank guarantee and appearance for further directions); failure to comply with directions would permit the Tribunal to pass appropriate orders. Issues involved:Appeal dismissed for non-prosecution; Compliance with Tribunal's directions; Restoration of appeal; Delay in filing restoration application; Service of notice; Change of address; Communication gap due to counsel's death.Comprehensive Analysis:Issue 1: Appeal Dismissed for Non-ProsecutionThe petitioner's appeal was dismissed by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) for non-prosecution. The Tribunal cited Rule 20 of the CEGAT (Procedure) Rules, 1982, stating that a notice regarding the hearing of the appeal was sent to the petitioner by registered post on 11th June, 1998, but no one appeared on behalf of the petitioner, leading to the dismissal of the appeal. Additionally, the Tribunal noted a delay of five years in the making of the application for restoration, which the petitioner failed to explain.Issue 2: Compliance with Tribunal's DirectionsThe petitioner contended that there was full compliance with the Tribunal's directions regarding the pre-deposit of the amount and furnishing of a bank guarantee. The petitioner claimed to have deposited the required amount and provided the bank guarantee within the stipulated time. The petitioner asserted that the consultant was informed about the compliance, but due to the consultant's death in 2001, there was a communication gap. The Tribunal's decision to dismiss the appeal for non-compliance was challenged by the petitioner.Issue 3: Restoration of AppealThe petitioner filed an application seeking restoration of the appeal, arguing that the dismissal was unjustified as the conditions were met, and the bank guarantee was extended up to 2005. The Tribunal, however, refused to restore the appeal, citing the delay in filing the restoration application and the alleged non-appearance of the petitioner during the hearing.Issue 4: Delay in Filing Restoration ApplicationThe petitioner acknowledged the delay in filing the restoration application but explained that the circumstances leading to the delay indicated a bona fide impression that the appeal was pending. The petitioner extended the bank guarantee till 2005, unaware of the appeal's dismissal in 1998. The petitioner emphasized the confusion caused by the transfer of the appeal from Bombay to Delhi, the counsel's death, change of address, and non-service of notices.Issue 5: Change of Address and Communication GapThe petitioner informed the Tribunal about the change of address in 1996. Despite this communication, the petitioner claimed to have received no notice regarding the hearing of the appeal. The petitioner argued that the lack of notice at the changed address, coupled with the consultant's death and the absence of any acknowledgment of service, justified the appeal's restoration.ConclusionThe High Court allowed the writ petition, setting aside the Tribunal's order and granting restoration of the appeal. The Court found merit in the petitioner's submissions, emphasizing the compliance with the Tribunal's directions and the communication gaps that led to the appeal's dismissal. The petitioner was directed to pay costs and keep the bank guarantee extended until the appeal's final disposal, with further directions scheduled before the Tribunal. Failure to comply would empower the Tribunal to take appropriate legal action.