We are sharing with you an important judgment of the Hon’ble Supreme Court, in the case of Balaji Steel Re-Rolling Mills Vs. Commissioner of Central Excise and Customs [2014-TIOL-92-SC-CX-LB] on following issue:
Whether the Tribunal is justified in dismissing an appeal for want of prosecution?
Facts & background:
Balaji Steel Re-Rolling Mills (“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, (“the Commissioner”) vide order dated July 20, 1999, re-fixed the annual capacity of production and duty liability of the Appellant. Being aggrieved, the Appellant filed an appeal to the Hon’ble Tribunal.
The Hon’ble Tribunal, vide Order dated January 18, 2002, remanded the matter back to the Commissioner with a direction to determine the capacity of production in accordance with law after hearing the Appellant. The Commissioner once again affirmed the Order dated July 20, 1999. The Appellant again filed an appeal before the Hon’ble Tribunal and the matter came up for hearing on August 22, 2012.
On the said date, the Appellant as also his counsels were not present before the Hon’ble Tribunal and therefore, the appeal was dismissed for want of prosecution under Section 35C of the Central Excise Act, 1944 (“the Excise Act”). The restoration application was also dismissed. The Appellant preferred an appeal before the High Court of Bombay, Bench at Aurangabad where also the appeal was dismissed on the ground that no substantial question of law arises for consideration.
Being aggrieved, the Appellant preferred an appeal by way of Special Leave before the Hon’ble Supreme Court of India.
The Apex Court after perusal of Section 35C of the Excise Act and Rule 20 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 (“the CESTAT Rules”) held the following:
- Section 35C of the Excise 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;
- A similar question came up for consideration before this Court in the case of Commissioner of Income Tax, Madras Vs. S. ChenniappaMudaliar, 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;
- Applying the principles laid down in the aforesaid case to the facts of the present case, as the two provisions are similar, it was held 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 of Bombay also erred in law in upholding the Order of the Tribunal.
Accordingly, the Apex Court set aside the Order of the High Court of Bombay, Bench at Aurangabad and also the Order of the Tribunal and directed to the Tribunal to decide the appeal on merits. Hence, the appeal was allowed with a cost of Rs. 25,000/- to be payable by the Commissioner.
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