2025 (10) TMI 460 - AT - Customs

Appeal dismissed for default under Rule 20 after repeated non-appearance and failure to show sufficient cause

Reliance Communications Infrastructure Ltd. Versus Commissioner of GST and Central Excise, Chennai

Appeal dismissed for default under Rule 20 of the CESTAT (Procedure) Rules, 1982, where the appellant failed to appear or arrange representation despite ... Dismissal of appeal for default - appellant does not appear on the date fixed for hearing - Rule 20 of CESTAT (Procedure) Rules, 1982 - HELD THAT:- Rule 20 of the CESTAT Procedure Rules, provides that if the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing can set aside the dismissal and restore the appeal. It is noticed that there is no request on record for the appeal to be decided on merits ex-parte based on the grounds preferred in the appeal in the absence of the appellant’s presence or representation through its counsel - if it was required to decide the matter on merits, without having the benefit of hearing the appellant and upon such hearing it was to hold against the appellant, then, having no locus to review own judgement since it would be rendered functus officio, it would thus be not only depriving the appellant of a chance to be heard, but also would be relegating the appellant to seek appropriate remedy in a higher judicial forum, if at all the appellant has justifiable reasons for repeated non representation and also lack of representation today. Considering the statutory position and the views expressed by the Hon’ble Apex Court in ISHWARLAL MALI RATHOD VERSUS GOPAL AND ORS. [2021 (9) TMI 1301 - SUPREME COURT], that adjournments can’t be given for the mere asking without any serious reason, backed with proof, for the non-appearance of the Appellant or his authorised representative on the dates of public hearing coupled with the fact that even after the notice has been sent and delivered to the appellant, the appellant has chosen not to arrange for representation or appear in person, no purpose would be served in continuing to keep this appeal pending - the appellant is not interested in pursuing the appeal that has been preferred and that the appeal is thus liable to be dismissed for default. The appeal is dismissed for default as per Rule 20 of CESTAT (Procedure) Rules, 1982. ISSUES PRESENTED AND CONSIDERED 1. Whether the Tribunal may dismiss an appeal for default where the appellant fails to appear or be represented on the hearing date despite service of notice. 2. The scope of the Tribunal's discretion under Section 35C (adjournments) and Rule 20 (action on appellant's default) of the CESTAT Procedure Rules, and limits on granting repeated adjournments. 3. Whether the Tribunal should proceed to decide the appeal on merits ex parte in the absence of the appellant or, alternatively, dismiss the appeal for default. 4. Availability of restoration of an appeal dismissed for default and the standard for setting aside such dismissal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Power to dismiss for non-appearance where notice has been served Legal framework: Rule 20 of the CESTAT (Procedure) Rules, 1982 confers discretion to the Tribunal to dismiss an appeal for default where the appellant does not appear on the day fixed for hearing or any adjourned day; the proviso permits restoration where the appellant subsequently satisfies the Tribunal that there was sufficient cause for non-appearance. Section 35C(1A) permits adjournments 'if sufficient cause is shown' but contains a proviso that no party shall be granted adjournment more than three times during hearing. Precedent treatment: The Court relied on the Supreme Court's condemnation of routine adjournments and dilatory tactics; that precedent was followed and applied to the facts. Interpretation and reasoning: The Tribunal found that service of notice by RPAD to the address given in Appeal Paper Book was effected. Despite effective service and multiple earlier listings, the appellant did not seek adjournment or arrange representation. Given express statutory discretion under Rule 20 and the proviso under Section 35C limiting adjournments, the Tribunal concluded that dismissal for default was appropriate in the absence of any sufficient cause or request supported by proof. Ratio vs. Obiter: Ratio - where notice has been duly served and no sufficient cause or representation is shown, the Tribunal may dismiss an appeal for default in exercise of its Rule 20 discretion; observance of Section 35C's limitation on adjournments supports such dismissal. Obiter - general remarks on the desirability of not deciding ex parte without hearing the appellant (see Issue 3). Conclusion: The appeal was liable to be dismissed for default because notice was served, no representation or adjournment request supported by reasons was made, and the Tribunal's discretion under Rule 20 was properly exercised. Issue 2 - Limits on adjournments under Section 35C and their impact on dismissal decisions Legal framework: Section 35C(1A) authorizes adjournments 'if sufficient cause is shown' and expressly provides that no adjournment shall be granted more than three times to a party during hearing. Precedent treatment: The Tribunal applied the Supreme Court's guidance deprecating mechanical or routine adjournments and emphasizing the harm caused by repeated, unsubstantiated adjournments. Interpretation and reasoning: The statutory proviso limiting adjournments permits the Tribunal to curb misuse of adjournment practice. In circumstances where an appellant repeatedly fails to prosecute an appeal and does not show sufficient cause, further adjournments are not warranted. The Tribunal viewed the appellant's absence across multiple listings, coupled with service of notice, as indicating lack of interest and insufficient cause for further adjournment. Ratio vs. Obiter: Ratio - Section 35C's proviso is a substantive limit that the Tribunal may rely on to refuse further adjournments and to exercise dismissal powers under Rule 20 when sufficient cause is not shown. Obiter - policy observations about delay and confidence in the justice system. Conclusion: The proviso in Section 35C supports refusal of further adjournments and, where appropriate, dismissal for default to prevent abuse of process and delay. Issue 3 - Whether to decide the appeal on merits ex parte or dismiss for default Legal framework: Rule 20 allows the Tribunal either to dismiss for default or to hear and decide the appeal on merits in the appellant's absence; the proviso permits restoration if sufficient cause later shown. Precedent treatment: The Tribunal relied on authority condemning routine adjournments and endorsing active case management, but also noted the need for fairness in adjudication. Interpretation and reasoning: The Tribunal considered but declined to decide the appeal on merits ex parte because doing so without the appellant's input risked depriving the appellant of the chance to be heard and would render the Tribunal functus officio if a later restoration application were successful. The Tribunal emphasized that deciding the matter on merits without appellant's presence could force the appellant to seek recourse in a higher forum, particularly if there were justifiable reasons for non-appearance that were not before the Tribunal. Given that no request to decide on merits ex parte was on record and to avoid irrevocable prejudice, dismissal for default (with liberty to seek restoration) was preferred to an ex parte adjudication on merits. Ratio vs. Obiter: Ratio - where the appellant has not been heard, and no request to proceed ex parte is on record, the Tribunal may dismiss for default rather than decide on merits, in order to preserve the appellant's right to seek restoration upon showing sufficient cause. Obiter - cautionary comments on functus officio consequences and appellate fairness. Conclusion: The Tribunal should not proceed to decide the appeal on merits ex parte in the absence of appellant representation and request; dismissal for default with liberty to restore is the appropriate course. Issue 4 - Restoration after dismissal for default and standard for setting aside dismissal Legal framework: Rule 20's proviso mandates that if an appellant, after dismissal for default, appears and satisfies the Tribunal that there was sufficient cause for non-appearance, the Tribunal shall set aside the dismissal and restore the appeal. Precedent treatment: The Tribunal applied statutory restoration principles and underlying Supreme Court guidance that adjournments and dismissal decisions must be balanced against the right to be heard. Interpretation and reasoning: The Tribunal dismissed the appeal for default but expressly granted liberty to apply for restoration, indicating that the statutory standard (showing sufficient cause) governs restoration. The Tribunal's reasoning recognizes both the need to deter dilatory conduct and the remedial avenue available to appellants who can demonstrate legitimate reasons for non-appearance. Ratio vs. Obiter: Ratio - dismissal for default does not extinguish the appellant's right to restoration; the Tribunal must set aside dismissal where sufficient cause for earlier non-appearance is shown. Obiter - none beyond reiteration of the statutory proviso. Conclusion: The appeal was dismissed for default, subject to the appellant's statutory right to seek restoration on proof of sufficient cause for non-appearance.