Harik Resins Pvt. Ltd. vs CESTAT, Bangalore

G. Rohini, J.—This writ petition is filed seeking a Certiorari to call for the record relating to the order passed by the Respondent No. 1 in Stay Application No. 226/2012 in Central Excise Appeal No. 387 of 2012, dated 8-5-2013 and to quash the same. We have heard Sri Vedula Venkata Ramana, learned senior counsel appearing for the petitioner and Sri V. Gopala Krishna Gokhale learned standing counsel appearing for the respondent.

The writ petitioner, which is a company represented by its Managing Director, filed an appeal before the 1st respondent against the order passed by the 2nd respondent dated 31-10-2011 demanding a total amount of Rs. 47,95,862/- in terms of the proviso to Section 11A(1) of the Central Excise Act, 1944 alleging that the petitioner had clandestinely manufactured and cleared ''resin'' during the period from October, 2000 to October, 2003.

By the same order, dated 31-10-2011 a penalty of Rs. 3,00,000/- was imposed on the Managing Director in his individual capacity. Therefore, a separate appeal was filed before the 1st respondent by the Managing Director in his individual capacity so far as the penalty so imposed is concerned.

Along with both the above said appeals, miscellaneous applications were filed for waiver of the pre-deposit and stay of collection of the amounts under the order under appeal.

While so, the impugned order dated 8-5-2013 came to be passed in Stay Application No. 226/2012 in Central Excise Appeal No. 387/2012 wherein the petitioner company is shown as the appellant. By the said order, waiver of pre-deposit and stay of recovery of the amounts pending the appeal was granted subject to the condition of the appellant depositing a sum of Rs. 25 lakhs apart from Rs. 15 lakhs already paid, within six (6) weeks.

The said order is challenged in this writ petition contending inter alia that the same is arbitrary, illegal apart from being in violation of the principles of natural justice since the said order was passed without notice to the petitioner.

A perusal of the impugned order itself shows that the appellant was not heard before passing the said order. The specific case of the petitioner is that no notice was served and thus the petitioner is deprived of an opportunity of being heard. In the impugned order, though it was mentioned that despite notice no one was present nor there was any request for adjournment, the petitioner disputed the same. To substantiate the plea that there was no notice, the petitioner placed before this Court the communication received from the 1st respondent''s office in response to the application made under the Right to Information Act which shows that copy of proof of dispatch of notice in Stay Application No. 226 of 2012 in Appeal No. 387 of 2012 is available, however the said appeal was shown to have been filed by the Managing Director in his individual capacity. It is observed from the said information furnished under the Right to Information Act that there is some confusion with regard to the Appeal Numbers preferred by the petitioner company and the Managing Director of the Company in his individual capacity. Under the circumstances, we do not find any justifiable reason to disbelieve the plea that the petitioner had no knowledge about the hearing of the Stay Application No. 226 of 2012.

Be that as it may. The fact remains that the impugned order came to be passed without hearing the petitioner. Under the circumstances, particularly in view of the petitioner''s plea that the deposit of the amounts as directed in the impugned order would cause undue hardship, we are of the opinion that the matter requires reconsideration after giving an opportunity of being heard to the petitioner. Moreover, as two appeals are preferred against the order dated 31-10-2011 passed by the 2nd respondent, one by the petitioner company and the other by the Managing Director in his individual capacity and there appears to be some confusion in the numbers assigned to the respective appeals, it is necessary to hear the applications arising out of both the appeals together to avoid any confusion.

Accordingly, the impugned order is set aside and the writ petition is disposed of with a direction to the 1st respondent to take up the applications both in Appeal Nos. E386/2012 and E387/2012 together and pass appropriate orders afresh after giving an opportunity of being heard to the appellants therein. No costs. Consequently, miscellaneous petitions, if any, pending in this writ petition, shall stand closed.