advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Monday, January 12, 2015

whether the Customs, Excise and Service Tax Appellate Tribunal (in short 'the Tribunal') has the power to dismiss the appeal for want of prosecution or not. -Apex court held that Tribunal could not= CIVIL APPEAL NO. 10265 OF 2014 (Arising out of Special Leave Petition (C) NO. 8738 OF 2014) Balaji Steel Re-Rolling Mills .... Appellant(s) Versus Commissioner of Central Excise and Customs .... Respondent(s)

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO. 10265 OF 2014
        (Arising out of Special Leave Petition (C) NO. 8738 OF 2014)


Balaji Steel Re-Rolling Mills                        .... Appellant(s)

                                  Versus

Commissioner of Central Excise
and Customs                                      .... Respondent(s)



                               J U D G M E N T

R.K. Agrawal, J.

1) Leave granted
2) The sole question of law which arises for consideration  in  the  present
appeal is as to whether  the  Customs,  Excise  and  Service  Tax  Appellate
Tribunal (in short 'the Tribunal') has the power to dismiss the  appeal  for
want of prosecution or not.
3) The appellant is a partnership firm engaged in the manufacture  and  sale
of Hot Re-rolled products.  The Commissioner of Central Excise and  Customs,
Aurangabad, vide order dated 20.07.1999, re-fixed  the  annual  capacity  of
production and duty  liability  of  the  appellant.   Being  aggrieved,  the
appellant moved the Tribunal.  The Tribunal, vide  order  dated  18.01.2002,
remanded the matter back to the Commissioner of Central Excise  and  Customs
with a direction to determine the capacity of production in accordance  with
law after hearing the appellant. The  Commissioner  of  Central  Excise  and
Customs, Aurangabad, once again affirmed the order  dated  20.07.1999.   The
appellant filed an appeal  before  the  Tribunal  against  the  order  dated
14.05.2004 passed by the Commissioner  of  the  Central  Excise  &  Customs,
Aurangabad which was placed for hearing on 22.08.2012.   On  the  very  said
date, the appellant as also his counsel were  not  present.   The  Tribunal,
therefore, dismissed the appeal for want of  prosecution.   The  restoration
application was also dismissed.  The appellant preferred  an  appeal  before
the High Court of Bombay, Bench at Aurangabad being  Central  Excise  Appeal
No. 14 of 2013.  The High Court, by order dated  18.01.2014,  dismissed  the
appeal on the  ground  that  no  substantial  question  of  law  arises  for
consideration.
4)    Against the said order, the appellant has  preferred  this  appeal  by
way of special leave.
5)     Heard  Mr.  Shashibhushan  P.  Adgaonkar,  learned  counsel  for  the
appellant  and  Shri  K.  Radhakrishnan,  learned  senior  counsel  for  the
respondent.
6)     Learned  counsel  for  the  appellant  submitted  that  even  if  the
appellant was not present before the Tribunal when the appeal was  taken  up
for hearing, it could not have been dismissed for  want  of  prosecution  as
Section 35C of the Central Excise Act, 1944 (in  short  'the  Act')  enjoins
upon the Tribunal to  pass  orders  thereon  as  it  thinks  fit,  that  is,
confirming, modifying or annulling the decision or  order  appealed  against
or may refer the case back to the authority which passed  such  decision  or
order with such directions as it may think fit, for a fresh adjudication  or
decision,  as  the  case  may  be,  after  taking  additional  evidence,  if
necessary.  Thus, there is no power vested in the Tribunal  to  dismiss  the
appeal for want of prosecution  even  if  the  appellant   therein  has  not
appeared when the appeal was taken up for hearing.
7)    He further submitted that Rule 20 of the Customs, Excise  and  Service
Tax Appellate Tribunal  (Procedure)  Rules,  1982  (in  short  'the  Rules')
cannot be resorted to as the Section itself  does  not  give  power  to  the
Tribunal to dismiss the appeal for want of prosecution.
8) Learned senior counsel for the respondent, however, submitted that  under
Rule 20 of the Rules, the Tribunal has been given the power to  dismiss  the
appeal for want of  prosecution  if  the  appellant  does  not  appear,  and
therefore, the order passed by the Tribunal as also by the High Court  calls
for no interference.
9)    Section 35C(1) of the Act which deals with the powers of the  Tribunal
reads as under:-
"35C. Orders of Appellate Tribunal.-(1) The Appellate  Tribunal  may,  after
giving the parties to the appeal an opportunity of being  heard,  pass  such
orders thereon as it thinks fit,  confirming,  modifying  or  annulling  the
decision or order appealed against  or  may  refer  the  case  back  to  the
authority which passed such decision or order with such  directions  as  the
Appellate Tribunal may think fit, for a fresh adjudication or  decision,  as
the case may be, after taking additional evidence, if necessary."


10)   Rule 20 of the Rules which gives a power to the  Tribunal  to  dismiss
the appeal for default in case  the  appellant  does  not  appear  when  the
appeal is called on for hearing reads as under:-
"RULE 20.  Action on appeal for appellant's default.  -  Where  on  the  day
fixed for the hearing of the appeal or  on  any  other  day  to  which  such
hearing may be adjourned, the appellant does not appear when the  appeal  is
called on for hearing, the Tribunal may, in its discretion,  either  dismiss
the appeal for default or hear and decide it on merits:

Provided that where an  appeal  has  been  dismissed  for  default  and  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, the Tribunal shall make an order setting aside  the  dismissal  and
restore the appeal."


11)   From a perusal of the aforesaid  provisions,  we  find  that  the  Act
enjoins upon the Tribunal to pass order on the appeal confirming,  modifying
or annulling the decision or  order  appealed  against  or  may  remand  the
matter.  It does not give any power to the Tribunal to  dismiss  the  appeal
for default or for want of prosecution in case the appellant is not  present
when the appeal is taken up for hearing.
12)   A similar question came up for consideration before this Court in  The
Commissioner of Income-Tax, Madras vs. S. Chenniappa Mudaliar, Madurai  1969
(1) SCC 591 wherein this Court considered the provisions of  Section  33  of
the Income-tax Act, 1922 and Rule 24 of the Appellate Tribunal  Rules,  1946
which gave power  to  the  Tribunal  to  dismiss  the  appeal  for  want  of
prosecution.  For ready reference, Section 33(4)  of  the  Income  Tax  Act,
1922 and Rule 24 of  the  Appellate  Tribunal  Rules,  1946  are  reproduced
below:-
Section 33(4) of the Income Tax Act, 1922
"33(4). The Appellate Tribunal may, after giving both parties to the  appeal
an opportunity of being heard, pass such orders thereon as  it  thinks  fit,
and  shall  communicate  any  such  orders  to  the  assessee  and  to   the
Commissioner."


Rule 24 of the Appellate Tribunal Rules, 1946
"24. Where on the day fixed for hearing  or  any  other  day  to  which  the
hearing may be adjourned, the appellant does not appear when the  appeal  is
called on for hearing, the Tribunal may dismiss the appeal  for  default  or
may hear it ex parte."

Considering the aforesaid provisions, this Court held as under:-
"7. The scheme of the provisions  of  the  Act  relating  to  the  Appellate
Tribunal apparently is that it has to dispose of an appeal  by  making  such
orders as it thinks fit on the merits.  It  follows  from  the  language  of
Section 33(4) and in particular the use  of  the  word  "thereon"  that  the
Tribunal has to go into the correctness or otherwise of the  points  decided
by the departmental authorities in the light of the submissions made by  the
appellant. This can only be done by giving  a  decision  on  the  merits  on
questions of fact and law and not by merely disposing of the appeal  on  the
ground that the party  concerned  has  failed  to  appear.  As  observed  in
Hukumchand Mills Ltd. v. CIT, the word "thereon" in Section 33(4)  restricts
the jurisdiction of the Tribunal to the subject-matter  of  the  appeal  and
the words "pass such orders as the Tribunal  thinks  fit"  include  all  the
powers (except possibly the power of enhancement) which are  conferred  upon
the  Appellate  Assistant  Commissioner  by  Section  31  of  the  Act.  The
provisions contained in Section 66 about making a reference on questions  of
law to the High Court will  be  rendered  nugatory  if  any  such  power  is
attributed to the Appellate Tribunal by which  it  can  dismiss  an  appeal,
which has otherwise been properly filed,  for  default  without  making  any
order thereon in accordance with Section 33(4). The position  becomes  quite
simple when it is remembered that the assessee or the CIT, if  aggrieved  by
the  orders  of  the  Appellate  Tribunal,  can  have  resort  only  to  the
provisions of Section 66. So far as the questions of fact are concerned  the
decision of the Tribunal is final and reference can be sought  to  the  High
Court only on questions of law. The High  Court  exercises  purely  advisory
jurisdiction and  has  no  appellate  or  revisional  powers.  The  advisory
jurisdiction can be exercised on a proper  reference  being  made  and  that
cannot be done unless the Tribunal itself  has  passed  proper  order  under
Section 33(4). It follows from all  this  that  the  Appellate  Tribunal  is
bound to give a proper decision on questions of fact as well  as  law  which
can only be done if the  appeal  is  disposed  of  on  the  merits  and  not
dismissed owing to the absence of the appellant. It was  laid  down  as  far
back as the year 1953 by S.R. Das, J. (as he then was) in CIT, v.  Mtt.  Ar.
S. Ar. Arunachalam Chettiar that the jurisdiction of  the  Tribunal  and  of
the High Court is conditional on there  being  an  order  by  the  Appellate
Tribunal which may be said to be one under Section 33(4) and a  question  of
law arising out of such an order. The Special Bench, in  the  present  case,
while examining this aspect quite appositely referred  to  the  observations
of Venkatarama Aiyar, J.  in  CIT  v.  Scindia  Steam  Navigation  Co.  Ltd.
indicating the necessity of the disposal of the appeal on the merits by  the
Appellate Tribunal. This is how the learned judge had put the matter in  the
form of interrogation:

      "How can it be said that the Tribunal should seek      for  advice  on
a question which it was not called     upon to consider and  in  respect  of
which it had     no opportunity of deciding whether the  decision    of  the
Court should be sought."

Thus looking at the substantive provisions of the Act  there  is  no  escape
from the conclusion that under Section 33(4) the Appellate Tribunal  has  to
dispose of the appeal on the merits and cannot  short-circuit  the  same  by
dismissing it for default of appearance."


13) Applying the principles laid down in the aforesaid case to the facts  of
the present case,  as  the  two  provisions  are  similar,  we  are  of  the
considered opinion that the Tribunal could not  have  dismissed  the  appeal
filed by the appellant for want of prosecution and it ought to have  decided
the appeal on merits even if the appellant or its counsel  was  not  present
when the appeal was taken up for hearing.  The High Court also erred in  law
in upholding the order of the Tribunal.
14)   We, therefore, set aside the order  dated  18.01.2014  passed  by  the
High Court of Judicature of Bombay, Bench at Aurangabad and also  the  order
dated 22.08.2012 passed by the Tribunal and direct the  Tribunal  to  decide
the appeal on merits.
15)   Accordingly, the appeal is allowed with a cost of Rs. 25,000/-  to  be
payable by the Respondent.


                            ..............................................J.

                                                              (ANIL R. DAVE)


                           ...............................................J.

                                                             (KURIAN JOSEPH)


                           ...............................................J.

                                                              (R.K. AGRAWAL)



NEW DELHI;
NOVEMBER 14, 2014.

ITEM NO.1A               COURT NO.14               SECTION III
(For judgment)
               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

       Petition(s) for Special Leave to Appeal (C)  No(s).  8738/2014

(Arising out of impugned final judgment and order dated  18/01/2014  in  CEA
No. 14/2013 passed by the High Court of Bombay at Aurangabad)

BALAJI STEEL RE-ROLLING MILLS                      Petitioner(s)

                                VERSUS

C.C.E.& CUSTOMS                                Respondent(s)



Date : 14/11/2014      This petition was called on for pronouncement
            of judgment today.


For Petitioner(s)      Mr. Shashibhushan P. Adgaonkar, Adv.


For Respondent(s)      Mr. K. Radhakrishnan, Sr. Adv.
                       Ms. Sunita Rani Singh, Adv.
                       For Mr. B. Krishna Prasad, AOR


      Hon'ble Mr. Justice R.K. Agrawal pronounced  the  reportable  judgment
of the Bench comprising Hon'ble Mr.  Justice  Anil  R.  Dave,   Hon'ble  Mr.
Justice Kurian Joseph and His Lordship.
      Leave granted.
      The appeal is allowed with a cost of Rs. 25,000/-  to  be  payable  by
the Respondent in terms of the signed reportable judgment.


      (R.NATARAJAN)                               (SNEH LATA SHARMA)
       Court Master                                  Court Master
            (Signed reportable judgment is placed on the file)

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.