Shree Bihari Forgins Pvt. Ltd. vs Commissioner Central Excise and Others

Heard learned counsel for the parties and perused the record.

M/s. Shree Bihari Forgings Private Ltd. through its Director Sri Pramod Kumar Goyal has filed this Excise Appeal under Section 35 (G) of the Central Excise Act, 1944 challenging the order passed by the Custom Excise and Service Tax Tribunal New Delhi dated 11.9.2014.

The facts relevant for the purposes of the present appeal are as follows:

"Against the order of the Commissioner (Appeals) Customs and Central Excise, Meerut-IInd dated 6th November, 2012 the company through its Director, Pramod Kumar Goyal filed an excise appeal before the Central Excise and Service Tax Appellate Tribunal, New Delhi, being Excise Appeal No. E/50912/2014-SM."

When the appeal came up for hearing on 11.9.2014 the other Director of the company namely Sri Lalit Agarwal through his Advocate Sri Rama Kant Sharma made an intervention application. It was stated that Mr. Goyal is not authorised to file the appeal as there was no resolution of the Board of the company authorising him to do so.

The stand so taken by the intervener Lalit Agarwal was challenged by Sri Pramod Kumar Goyal, the Director who had filed the appeal on the ground that he had a valid authorisation from the Board in terms of the resolution, a copy whereof was produced before the Tribunal.

The Tribunal only after noticing the aforesaid two facts has decided to dismiss the appeal along with misc. applications and interim stay application on the ground that it cannot act as a civil court and cannot examine the inter se dispute between the two directors. It is against this order the present excise appeal has been filed.

Counsel for the petitioner submits that the Tribunal was not called upon to enter into any inter se dispute of directors. It had to satisfy itself as to whether the appeal filed by Mr. Goyal as the Director had the backing of a valid resolution of Board of Directors of the company or not. If there was such a resolution authorizing Sri Goyal to file the appeal, no further issue with regard to directorship of the company had to be gone into and in that circumstance the appeal was to be treated as competent which aspect of the matter has been ignored by the appellate tribunal.

Counsel for Sri Lalit Agarwal, i.e. the other Director submitted before this Court that the resolution produced by Sri Goyal is not a valid resolution in fact no meeting of the Board had taken place for the last eight years. He has referred to the order of the company law board dated 3rd December, 2014.

We have heard the counsel for the parties and examined the records of the present writ petition.

From the order of the Commissioner (Appeal) we find that besides demand of duty, penalty has also been imposed upon Sri Pramod Kumar Goyal being the active Director and that the appeal before the Commissioner (Appeal) was contested on behalf of the company by Sri Pramod Kumar Goyal, however, in no circumstance the Tribunal can refuse to enter into the issue as to whether the appeal as filed by Sri Pramod Kumar Goyal was competent or not i.e. it had the backing of a valid resolution of the company or not. Such issues must necessarily be gone into by the Tribunal only for the purposes of ascertaining as to whether the appeal on behalf of the company has been filed by a competent person or not and nothing beyond it. Any other inter se dispute between the two Directors of the Company had not be examined by the Tribunal.

We are, therefore, of the opinion that in the facts of the case, the Tribunal has misdirected itself in dismissing the appeal only on the ground that a dispute has been raised with regard to the correctness or otherwise of the resolution said to have been made in favour of Pramod Kumar Goyal in the matter of filing of the appeal. The Tribunal must adjudicate upon the said issue on the basis of the material brought on record before it and must decide as to whether the appeal as presented was competent or not. All issues on merits of the maintainability of the appeal are left open to be examined by the Tribunal as per the evidence led by the parties and after affording opportunity to them.

In view of the aforesaid, the order impugned passed by the Tribunal cannot be legally sustained and is hereby quashed. The appeal is restored before the Tribunal.

Let the same be decided afresh in the light of the observations made hereinabove.

Since the matter has been remanded to the tribunal for a fresh decision, this appeal is allowed.

An application has also been made on behalf of the administrator appointed by the Company Law Board for discharging the notice. He need no entertain the application in view of the order which has been passed above.

We clarify that the order passed by the Company Law Board on the issue as to which person has a right to manage the company shall be kept in mind while deciding the aforesaid issue by the Tribunal.

Heard learned counsel for the parties.

Cause has sufficiently been shown in affidavit filed in support of the restoration application.

The restoration application is allowed. Order dated 27.02.2015 is recalled. The writ petition is restored to its original number.

Cause shown in the affidavit filed in support of the delay condonation is to the satisfaction of the Court.

The delay condonation application is allowed. Delay in filing of the restoration application is condoned.