Customs, Excise and Gold Tribunal - Delhi
D And H Secheron Electrodes Private ... vs Collector Of Central Excise on 7 July, 1987
Equivalent citations: 1987(13)ECR575(TRI.-DELHI), 1987(31)ELT947(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. Being dis-satisfied with the imposition of a penalty of Rs. 1,00,000.00 (Rs. One lakh only) upon the appellants under Rule 173(Q) of Central Excise Rules, 1944, the appellants have filed their captioned appeals.
2. Factual Backdrops: The appellants are the manufacturers of Welding Electrodes falling under Tariff Item 50. On the basis of search and seizu're of a number of documents and the statemsnts recorded, a Show Cause Notice calling upon the appellants to show cause as to why a penalty be not imposed upon them under Rule 173Q of Central Excise Rules, 1944 and why duty amounting to Rs. 32,702.11 at the appropriate rate on the- electrodes surreptitiously manufactured and removed without payment of Central Excise duty during the year 1972 and 1973 be not demanded under Rule 9(2) of Central Excise Rules, 1944 was issued to the appellants. In reply, while abjuring their guilt they took various pleas in their defence and requested for personal hearing. Consequently, personal hearing was fixed for 22-12-1983 but the appellants vide their letter dated 19-12-1983 requested for adjournment as their counsel Shri Barjor Singh was not available. This request was accepted and the case was adjourned to 30-12-1983. But the appellant vide their letter dated 28-12-1983 again, requested for adjournment on the grounds that it won't be possible for their counsel Shri Barjor Singh to appear on 30-12-1983 being busy.
It appears that this request was not acceded to ana the Adjudicating Authority decided the case ex parte and ultimately held that the charges stand proved. Consequently, he imposed a penalty of Rs. 1,00,000.00 (Rs. one lakh) upon the appellants. As regards the duty demanded the Adjudicating Authority held that the duty demanded in the Show Cause Notice is under Rule 9(2) of the Central Excise Rules, 19H but the same is not legally demandable as the show cause notice was not issued in time.
3. The Department has also filed their Cross-Objections which are nothing but in the nature of replies to the grounds taken in the appeals.
4. We have heard S/Shri M. Ganesan, B.B. Bagga and S.N. Kohli, learned counsels for the appellants and Shri Rakesh Bhatia and Smt. Nisha Chaturvedi, learned SDRs for the respondents.
5. Shri M. Ganesan, learned counsel for the appellants at the outset submitted that the Adjudicating Authority acted illegally in refusing the adjournment and deciding the case ex parte. We further submitted that from the grounds and the legal points raised in defence as set out in the reply to the show cause notice and mentioned in the impugned order itself it was necessary for the Adjudicating Authority to decide the case only after hearing the appellants. In other words, he submitted that the denial of personal hearing has resulted in the grave injustice to the appellants, inasmuch as, the appellants could not get any opportunity to explain the various intricacies of the defence pleas. On this premises he invited our attention to the important admitted facts available on the record to the effect that the case was fixed for personal hearing for the first time on 22-12-1983 and immediately the appellants after contacting their counsel Shri Barjor Singh requested for adjournment well in advance vide their letter dated 19-12-1983 with a specific request that the case be adjourned and refixed in the first week or last week of January, 1984 as their counsel will not be available earlier being busy in other cases. He submitted that this request was acceded to but the Adjudicating Authority denied the opportunity of hearing by fixing the date for hearing on 30-12-1983. He submitted that the said notice for hearing on 30-12-1983 was received on 27-12-1983 and immediately after the receipt of that notice the appellants requested to adjourn the case vide their application dated 28-12-1983 again making a specific request to fix the case in the first week or last week of January, 1984, as also requested earlier. But the Adjudicating Authority without informing the appellants that their request for adjournment is rejected and therefore the appellants should appear for personal hearing on 30-12-1983 in utter violation of the principles of natural justice decided the case ex parte. In a nutshell, his submission was two-fold. Firstly, that the Adjudicating Authority erred in not adjourning the case and secondly that the notice of hearing for 30-12-1983 was too short for their advocates, being of 3 days duration only, to attend the case at Indore as their advocate admittedly was residing at Gwalior. Thus, it cannot be said that any effective opportunity of being* heard was given to the appellants. In reply, the learned SDRs supported the impugned order and drew our attention to the case law cited in the impugned order.
6. After considering the arguments so advanced we are of the considered view that no effective opportunity of being heard was given to the appellants in the peculiar facts and circumstances of the instant case. It is true that the Government of India in the case of Sohana Woollen Mills, Ludhiana reported in 1982 E.L.T. 757 while deciding the revision petition observed that if the opportunity of being heard was once given to the party who failed to avail of the same it cannot be said that the Collector had not complied with the principles of natural justice. But it would appear from that case that it was not the case where the adjournment was sought for but was not given. Likewise, it is true that in the case of T.C.G. Industries Pvt. Ltd. v. Union of India 1983 E.L.T. 319, a learned single Judge of the Hon'ble Bombay High Court on the facts and circumstances of the case held that it cannot be laid down as a rule that as long as the party is not ready to come for hearing the Revisional Authority must adjourn the hearing. In that case it was claimed by the petitioners of that case that on receipt of the notice of hearing the petitioners by their reply claimed that the date of hearing at Delhi should be changed and a fresh suitable date should be communicated to them. But it was found as a fact that the alleged reply sent by the petitioners never reached the Revisional Authorities prior to the hearing and therefore there was no occasion to consider the request for further adjournment. Under these circumstances the said observations were made by the Hon'ble High Court. Thus the facts of that case are distinguishable. In the instant case it is an admitted fact that the request for adjournment was duly received by the Adjudicating Authority before the date of hearing on 30-12-1983 and he did take note of such request. Thus questions arise as to whether the Adjudicating Authority was right in refusing the adjournment and whether effective opportunity of being heard was given to the appellants. On these points law appears to be well settled. In the case of Maneka Gandhi v. Union of India AIR 1978 SC 597(630) their Lordships of the Supreme Court held that it is a fundamental principle of natural justice that not only the opportunity to hear should be given to the party but it should be an effective opportunity to defend. This Tribunal in the case of Assam Saw Mills and Timber Co. Ltd. v. Collector of Central Excise, 1986 (23) E.L.T. 505 also held that there would be ab initio denial of natural justice if no effective opportunity is given to the party to put-forth his case before the Adjudicating Authority. In the case of Basant Papers Mill v. Collector of Central Excise 1987 (10) E.C.R. 577, one of us (Member, Judicial) has also taken the same view and held that an empty compliance to the principle of audi alteram partem is not sufficient. In the instance case immediately after the receipt of the notice for personal hearing on 22-12-1983 a specific request was made by the appellants well before time that since their counsel resides at Gwalior and would be busy till 31-12-1983 it won't be possible for him to attend the hearing on 22-12-1983 and therefore the case be adjourned and the date be fixed in the first week or last week of January, 1984. However, the Adjudicating Authority without assigning any reason arbitrarily fixed the case for hearing on 30-12-1983 to which the appellants immediately responded and repeated their request for adjournment of the case somewhere either in the first week or last week of January, 1984. But it appears that the Adjudicating Authority without applying its mind to the facts and circumstances of the case and also to the specific request so made chose to rely upon the general principles of procedural law that it is not open to the party to urge that so long as the party is not ready the Revisional Authority must adjourn the hearing. This rule of procedural law, in our opinion, is not a rule of thumb; much depends upon the facts and circumstances of each case and the bonafides of such request. No general rule can be laid down. The instant case is also not a case where the appellants failed to avail of the opportunity of hearing. As would be seen above, right from the beginning the appellants made their request for adjournment and fixing of the case in January, 1984. The Adjudicating Authority himself has not disputed the bonafides of such request. Even before us the bonafides of the said request was not disputed. Not only this it is an admitted fact that a notice of hearing for 30-12-1983 was issued only 3 days back and was received by the appellants only on 27-12-1983 to which they immediately responded and made request for adjournment. It is on record that their counsel was residing at Gwalior. Under these circumstances asking the appellants to appear at such a short notice appears to be an empty compliance to the principle of audi alteram pattern. From the above it would appear to us that no effective opportunity was given to the appellants to put their case before the Adjudicating Authority. Besides, from the various grounds urged before us on the merits of the case also by the learned counsel for the appellants we feel that had an effective opportunity been given to the appellants to put forth their case the Adjudicating Authority would have given his due consideration to the various grounds taken in appeal which were reiterated before us also in a more judicious manner. At this stage we would like to impress that in the interest of justice it should be the earnest endeavour of the authorities concerned to make available to the appellants the right of personal hearing in an effective manner.
7. Under the aforesaid circumstances we feel expedient in the interest of justice that the case should be remanded for deciding the case afresh after giving an effective and proper opportunity to the appellants of being heard. Accordingly, we allow the appeals and set aside the impugned order and remand the case to the Adjudicating Authority with the direction to decide the case de novo from the stage from which it was made ex parte after giving an effective opportunity to the appellants to defend. Since we are remanding the case no separate order is required to be passed on the Cross-Objections filed by the Department and the same shall be deemed to have been disposed off by this order.