TaxTMI 
TaxTMI 
2011 (3) TMI 1131
X X X X Extracts X X X X
X X X X Extracts X X X X
....missing the appeal for non- compliance of requirement of pre-deposit. 4. As far as Excise Appeal No. 2094 is concerned facts thereof reveal that the appellants are engaged in manufacture of 'Ada' brand pan masala containing tobacco commonly known as gutka classifiable under Chapter sub-heading 24039990 of the first schedule to the Central Excise Tariff Act, 1985 and as they were found to have failed to comply with the requirement of provisions of excise law, a show cause notice dated 13.07.2009 came to be issued which was contested by the appellants by filing their reply dated 25.01.2010. The adjudicating authority, after hearing the party, confirmed the demand to the tune of Rs. 6,08,875/- alongwith interest and equal amount of penalty under its order dated 19.03.2010. Being aggrieved, the appellants filed the appeal before Commissioner (Appeals) and alongwith appeal, filed an application for dispensing with the requirement of pre-deposit which came to be disposed of by the Commissioner (Appeals) under order dated 08.06.2010 requiring the appellants to deposit 20% of the entire amount of duty confirmed and the penalty imposed by the adjudicating authority under his order dated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rement of pre-deposit and in the absence of any cause being shown, the appeal was liable to be dismissed and was in fact accordingly dismissed. 6. In Excise Appeal No. 3737 of 2010, the appellants are engaged in manufacture and clearance of MS Bars, MS Flats, MS angels and MS Channels classifiable under Chapter 72 of the first schedule to the Central Excise Tariff Act, 1985. Having found to have committed certain violations of the provisions of excise law, a show cause notice came to be issued on 21.07.2008 which was contested by the appellants by filing their reply dated 10.09.2009. After taking into consideration rival contentions, the Deputy Commissioner, Lucknow by his order dated 30.11.2009 confirmed the demand to the tune of Rs.92,288/- while appropriating equal amount already deposited and also imposed penalty of equal amount. Being aggrieved, the appellants filed appeal before the Commissioner (Appeals) alongwith an application to dispense with the requirement of pre-deposit. The said application came to be disposed of by an order dated 25.05.2010 directing the appellants to deposit 50% of the entire amount of penalty within two weeks. The appellants did not deposit the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw and, therefore, were not enforceable. It is their further contention that the hearing granted post disposal of such applications cannot amount to granting hearing to the aggrieved party in relation to the requirement of pre-deposit and, therefore, would not be sufficient compliance of basic principle of natural justice. On the other hand, it is the case of the department that Section 35F does not specifically prescribe nor indirectly suggest requirement of personal hearing before passing an order on such application. In fact, the provision comprised under Section 35F merely deals with the requirement of deposit of the amount confirmed by the adjudicating authority to enable the appellants to be heard in appeal and in case of requirement of waiver of such deposit to satisfy the appellate authority in that regard. In the absence of statutory provision regarding the requirement of personal hearing under Section 35F, according to the department the order passed thereunder even without granting personal hearing cannot stand vitiated. Besides, the appellants were duly heard in relation to their request for modification and after considering that case in that regard, the appeals having....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fies that the expression #duty demanded# in the said section would include amount determined under section 11D, the amount of erroneous Cenvat Credit taken, amount payable under rule 57CC of the Central Excise Rules, 1944, the amount payable under rule 6 of the Cenvat credit Rules and interest payable under the provisions of the said Act or the rules made thereunder. 11. Perusal of the said provision of law therefore would certainly disclose that there is no specific provision for personal hearing being granted to the appellant before disposing the application filed by the appellants for dispensing with the requirement of deposit of the duty or penalty. Rather the provision of law comprised under Section 35F makes it mandatory for every appellants to deposit the amount demanded and confirmed by the adjudicating authority. Certainly, it also gives right to the appellants to file an application for dispensing such requirement of deposit of amount. However, if such application is filed, then discretion is given to the appellate authority to decide the same subject to condition that the appellate authority may impose appropriate conditions while dispensing wholly or partly the requi....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., if in his own discretion if he requires the appellant or the applicant to be heard because of special facts and circumstances of the case, then certainly it is always open to such authority to decide the appeal or the application only after affording a personal hearing. But any order passed after taking into consideration the points raised in the appeal or the application shall not be held invalid merely on the ground that no personal hearing had been afforded. This is all the more important in the context of the taxation and revenue matters. When an authority has determined a tax liability or has imposed a penalty, then the requirement that before the appeal is heard such tax or penalty should be deposited cannot be held to be unreasonable as already pointed out above. In the case of Shyam Kishore v. Municipal Corporation of Delhi reported in (1993) 1 SCC 22 it has been held by this Court that such requirement cannot be held to be harsh or violative of Article 14 of the Constitution so as to declare the requirement of pre-deposit itself as unconstitutional. In this background, it can be said that normal rule is that before filing the appeal or before the amount which he has been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n provision makes it obligatory for the appellants to deposit the amount, the proviso gives discretionary power to the appellate authority to reduce the burden regarding pre-deposit upon the assessee subject to the condition as it may deem fit apart from taking into consideration the undue hardship which the appellants may suffer and bearing in mind the revenue interest. Nowhere the provision of law speaks of any requirement of personal hearing before passing any order in exercise of discretionary power. 15. The Delhi High court in Anil Chanana case while dealing with the matter under the provisions of Customs (Compounding of Offences) Rules, 2005 and particularly in relation to the proviso to Rule 4(3) of the said rules which provides that where the Compounding Authority intends to reject the compounding application, then application should be heard in the matter and the grounds of rejection shall be mentioned in the order, held that there is no requirement in any provision in the Rules which mandates the Compounding Authority to hear personally the investigating agency in the event the compounding application is allowed. Reference was also made to the decision of the Apex Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thereof. In case of discretionary power the rule of personal hearing is not absolute in the absence of statutory requirement thereof. 18. In Indian Refrigerator Co. Ltd. case the Madras High Court decided the matter essentially on the basis of decision in the ITC case. 19. It is, however, pertinent to note, and at the cost of repetition, that the Apex Court in Jesus Sales Corporation has specifically ruled that the statutory requirement is that before the appeal is being heard the appellants have to deposit the amount demanded under the adjudication order and dispensation of such deposit is an exception which is entirely in the discretion of the Appellate Authority, albeit to be exercised judiciously. That, however, does not mean that the personal hearing is absolutely necessary. 20. In the cases in hand, it is seen that though initially when the applications for dispensation were filed before the Commissioner (Appeals) alongwith the appeals by the appellants, the same were disposed of without personal hearing to the appellants. Nevertheless they were disposed of with speaking orders communicated to the parties and dispensing with 80% and 50% of the amount demanded u....