Appeal allowed; dismissal for want of prosecution under Rule 20 (Procedure Rules, 1982) set aside; matter remitted for merits

HC allowed the appeal, setting aside the Tribunal's dismissal under Rule 20 of the CESTAT (Procedure) Rules, 1982, because the Tribunal improperly dismissed for want of prosecution instead of deciding the appeal on merits. Relying on the Supreme Court's holding that the Central Excise Act does not empower the Tribunal to dismiss appeals for default, the HC held the impugned order unsustainable and remitted the matter for adjudication on merits. The question of law addressed by the Supreme Court was found to be determinative.

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Whether the CESTAT could dismiss an appeal for non-appearance under Rule 20 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, was framed as a substantial question: "A. Whether the CESTAT erred in dismissing the appeal for non-appearance of appellant or its counsel under Rules 20 of the CESTAT (Procedure) Rules, 1982 when the CESTAT had no power as per Section 35(C) of the Central Excise Act, 1944 to dismiss the appeal in default?" The Supreme Court in Balaji Steel Re-Rolling Mills v. Commissioner of Central Excise and Customs, (2014) 16 SCC 360 held that while the Tribunal may "confirm[], modify[] or annul[] decision or order appealed against or remand the matter," the Central Excise Act, 1944 does not empower the Tribunal to dismiss an appeal for default or for want of prosecution. Applying that principle, the CESTAT's dismissal under Rule 20 and rejection of restoration were held unsustainable because the Tribunal "should have decided the appeal on merit, even if the appellant or his counsel was not present." The impugned orders dated 19/04/2023 and 25/07/2024 were quashed and set aside; the appeal disposed accordingly.

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