Polar Industries Limited vs CESTAT

Indira Banerjee, J.—This writ application is directed inter alia against an order dated 25th October, 2012 passed by the Customs, Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata in a Miscellaneous Application (ROA No. E/M/163/2012) filed by the petitioner in connection with Excise Appeal No. E/A/387/2009. The aforesaid Miscellaneous Application was filed by the petitioner praying that the Orders of the learned Tribunal No. S-339-341/KOL/2011, dated 17th November, 2011 and A-85-87.KOL/2012, dated 14th February, 2012 be recalled and/or modified.

Aggrieved by an Order-in-Original No. 29/Commr. (De no-vo)/CE/KOL-V/Adjn/09, dated 31st March, 2009 passed by the Commissioner of Central Excise, Kolkata-V, the writ petitioner preferred an appeal being Excise Appeal No. E/A/387/2009 therefrom. The petitioner also made an application u/s 35F of the Central Excise Act, 1944 for waiver of pre-deposit.

The said application was listed for hearing before the learned Tribunal on 14th November, 2011 when one K. Goswami, clerk of the writ petitioner appeared and sought adjournment. The hearing of the application was accordingly adjourned till 17th November, 2011.

On 17th November, 2011 no one appeared for the writ petitioner. There was also no request for adjournment. The learned Tribunal accordingly passed an Order No. S-339-341/KOL/2011, dated 17th November, 2011 directing the writ petitioner to deposit all dues adjudged against the writ petitioner within a period of six weeks from the date of receipt of the Order dated 17th November, 2011 and to report compliance on 9th January, 2012.

As recorded in the order impugned, the aforesaid order dated 17th November, 2011 was dispatched on 22nd November, 2011. On 9th January, 2012 no one appeared for the applicant, nor was any request for adjournment made. The matter was accordingly adjourned by the Tribunal till 30th January, 2012. The matter was listed on 13th February, 2012 for reporting compliance. On 14th February, 2012 the appeal was dismissed on the ground of non-compliance of the Order dated 17th November, 2011 whereby the writ petitioner had been directed to deposit the outstanding dues as adjudicated. According to the petitioner, the Order dated 17th November, 2011 was only received on 18th January, 2012. Six weeks from 18th January, 2012 meant that the petitioner could make pre-deposit within 29th February, 2012. As such there could be no justification in dismissal of the appeal on 14th February, 2012. A further point has been taken on behalf of the petitioner. The petitioner has claimed that the petitioner had no notice of the date of hearing on 14th February, 2012. The appeal was posted for hearing on 13th February, 2012. On that day no work was held since a sitting member of CESTAT posted at Ahmedabad had died. The petitioner has contended that the petitioner was entitled to a fresh notice of hearing.

On behalf of the respondents however, it was contended that all the lawyers, who attended the learned Tribunal on 13th February, 2012 were duly informed that matters which could not be taken on that day would be taken up the next day. A notice to that effect was also put up on the Notice Board.

However, as per Rule 18 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 read with Section 37C of the Central Excise Act, 1944, the Tribunal is required to notify to the parties the date and place of hearing of the appeal or application as the case might be, in the manner in which notices are required to be served. u/s 37C all notices under the said Act are required to be served by tendering the decision, order, summons or notice to the addressee or sending it by registered post with acknowledgement, due to the addressee or his authorized agent, if any. If the decision, order, summons or notice cannot be served in the aforesaid manner, it might also be served by affixing a copy thereof in some conspicuous part of the factory or warehouse or other place of business or at the usual place of residence, the notice may be put up on the notice board of the office of the concerned authority which took such decision and/or issued the order and/or notice. There is substance in Mr. Ray''s contention that when statute and/or statutory rules require that a thing should be done in a particular manner, it is to be done in that manner alone or not at all, as held by the Hon''ble Supreme Court in its judgment reported in Ramchandra Keshav Adke (Dead) by Lrs. and Others Vs. Govind Joti Chavare and Others, . The appeal might have been taken up for hearing on 14th on oral intimation or by notice in the notice board only if both the parties had consented to the taking up of such appeal. In other cases notice of hearing would have to be issued.

Mr. Bharadwaj submits there are no materials on record to show that the petitioner had no notice. Had the petitioner attended the hearing on 13th February, he would have known of the postponement of the hearing till 14th February. Knowledge of the notice cannot however, be presumed. It is absurd to suggest that if the petitioner had been present on the 13th it would have known of the hearing on 14th. It is quite possible that on knowing that the appeal would not be taken up, the petitioner and/or its representative may have thought it unnecessary to actually enter the Tribunal premises. Be that as it may, the statutory requisites as indicated above had not been complied with. The Order dated 14th February, 2012 is patently not sustainable in law.

It appears that the earlier Order dated 17th November, 2011 was also passed ex parte. The petitioner made the Miscellaneous Application under Rule 41 of the Customs Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 which has given rise to the order impugned. The said rule enables the Tribunal to make such order or give such direction as might be necessary. The powers of the learned Tribunal under Rule 21 are wide. The learned Tribunal might pass such orders or give such directions as might be necessary or expedient to secure the ends of justice. In my view, Rule 41 certainly enables the learned Tribunal to recall vary and/or modify an order for pre-deposit.

In the instant case, the Miscellaneous Application had been dismissed on the reasoning that once an order u/s 35F of the Central Excise Act, 1944 had been passed, the learned Tribunal could not modify or review the aforesaid judgment. In arriving at its aforesaid finding the learned Tribunal relied on the judgment of the Karnataka High Court in the case of Commissioner of Central Excise Vs. Mc Dowell and Co. Ltd., . The portion of the judgment relied upon by the learned Tribunal is extracted herein below for convenience:

I am unable to accept the contention that an existence of mere prima facie case in itself amounts to causing undue hardship to an assessee if the assessee is required to fulfill the requirements of pre-deposit. It is necessary to recall some words of caution and wisdom sounded by the Supreme Court in this regard in the case of Jesus Corporation referred to earlier. If the test is applied, the order is woefully lacking in the Tribunal having not exhibited its awareness to the requirements of proviso of Section 35F of the Act. It is also clear that the Tribunal after having exercised jurisdiction for the purposes of passing an order for waiver of pre-deposit under the proviso to Section 35F of the Act cannot modify that order subsequently like an appellate authority, nor can keep tinkering with the order as and when applications for modification of the order are filed. It is significant to notice that the Supreme Court has ruled that the Tribunal does not even have the power to review its orders while exercising its appellate power u/s 35C of the Act, See Commissioner of Central Excise Vs. A.S.C.U. Ltd., , when this is the legal position with regard to the exercise of the power in respect of the main appeal itself, it cannot be higher while passing orders in exercise of the power under the proviso to Section 35F, which is a provision stipulating the condition for the maintainability of the appeal.

With greatest respect to the Hon''ble Court, this Court is unable to agree with the reasoning of the judgment in Commissioner of Central Excise, Bangalore-III v. McDowell & Co. Ltd. (supra).

An interim order can always be modified for the ends of justice and the rules expressly provided for such modification. Needless to mention that no final order disposing of an appeal on merits can be modified. It cannot also be reviewed, unless the rules expressly provide for review.

Mr. Bharadwaj took a preliminary objection to the maintainability of the writ application. Mr. Bharadwaj submitted that there was an alternative remedy of appeal available to the writ petitioner. This Court should remit the writ application to its recourse to the alternative remedy of appeal.

Section 35G of the Central Excise Act, 1944 provides that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law. The alternative remedy of appeal is subject to the satisfaction of the High Court that not only a question of law but a substantial question of law is involved. Where the alternative remedy is not definite, but subject to the satisfaction of the High Court of involvement of a substantial question of law, a writ application should, in my view, not be rejected on the sole ground of existence of an alternative remedy of appeal. Moreover, it is doubtful whether any substantial question of law is involved in the instant case.

The impugned order cannot be sustained in law and the same is set aside and quashed. The writ application is, accordingly allowed.

The learned Tribunal shall consider the Miscellaneous Application afresh in the light of the observation made above without granting unnecessary adjournment but upon compliance with the requisite provisions of law with regard to service of notice of dates of hearing.

It is made clear that this Court has not adjudicated the merits of the contention of the respective parties with regard to the quantum of pre-deposit or the merits of the main appeal. Urgent certified photostat copy of this order, if applied for, be supplied to the learned Advocates appearing for the parties, subject to compliance with all requisite formalities.