Custom, Excise & Service Tax Tribunal
M/S Packwell Plastic (P) Ltd vs Commr. Of Central Excise, Kolkata V on 29 March, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATETRIBUNAL, EAST REGIONAL BENCH : KOLKATA
SP-797/09 & Ex.Appl.No.558/09
Arising out of Order-in-Appeal No.14/Kol.V/2009 dated 11.8.2009 passed by Commr. of Central Excise (Appeals) Kolkata.
M/s Packwell Plastic (P) Ltd.
APPELLANT(S)
VERSUS
Commr. of Central Excise, Kolkata V.
RESPONDENT (S)
APPEARANCE Shri S. K. Roy Chowdhury, Advocate for the Appellant (s) Shri A. K. Sharma, JDR for the Department SP-824,825/09 & Ex.Appl.Nos.580,581/09 Arising out of Order-in-Appeal No.157/Kol.III/2009 dated 29.9.2009 passed by Commr. of Central Excise (Appeals), Kolkata. M/s The New Indian Glass Works (Cal) Pvt. Ltd..
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata III.
RESPONDENT (S) APPEARANCE Shri K. K. Banerjee, Advocate for the Appellant (s) Shri A. K. Sharma, JDR for the Department SP-847/09 & Ex.Appl.No.592/09 Arising out of Order-in-Appeal No.13/Kol.V/2009 dated 7.8.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Bata India Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata V. RESPONDENT (S) APPEARANCE Shri J. P. Khaitan, Sr. Advocate for the Appellant (s) Shri R. K. Chakraborty, SDR for the Department SP-848/09 & Ex.Appl.No.593/09 Arising out of Order-in-Appeal No.11/Kol.V/2009 dated 6.8.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Vishwa Industrial Company Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata V. RESPONDENT (S) APPEARANCE Shri Arijit Chakraborty, Advocate for the Appellant (s) Shri R. K. Chakraborty, SDR for the Department SP-851/09 & Ex.Appl.No.595/09 Arising out of Order-in-Appeal No.123/Kol.III/2009 dated 6.8.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s A. R. Stanchem (P) Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata III.
RESPONDENT (S) APPEARANCE Shri Arijit Chakraborty, Advocate for the Appellant (s) Shri R. K. Chakraborty, SDR for the Department SP-875/09 & Ex.Appl.No.619/09 Arising out of Order-in-Appeal No.11/Kol.I/2009 dated 19.8.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Raman Industries.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata I. RESPONDENT (S) APPEARANCE Shri S. K. Roy Chowdhury, Advocate for the Appellant (s) Shri R. K. Chakraborty, SDR for the Department SP-924/09 & Ex.Appl.No.659/09 Arising out of Order-in-Appeal No.25/Kol.VII/2009 dated 14.9.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Wacker Metroark Chemical (P) Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata VII.
RESPONDENT (S) APPEARANCE Shri K. K. Banerjee, Advocate for the Appellant (s) Shri J. A. Khan, SDR for the Department SP-948/09 & Ex.Appl.No.675/09 Arising out of Order-in-Appeal No.187/Kol.III/2009 dated 11.11.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Titagarh Steels Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata III.
RESPONDENT (S) APPEARANCE Shri J. P. Khaitan, Sr. Advocate for the Appellant (s) Shri J. A. Khan, SDR for the Department SP-979 & 980/09 & Ex.Appl.Nos.694 & 695/09 Arising out of Order-in-Appeal No.47,46/Hal/2009 both dated 18.9.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Hooghly Mills Company Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Haldia RESPONDENT (S) APPEARANCE None for the Appellant (s) Shri J. A. Khan, SDR for the Department SP-981/09 & Ex.Appl.No.696/09 Arising out of Order-in-Appeal No.153/Kol.III/2009 dated 30.9.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Jessop & Company Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata III.
RESPONDENT (S) APPEARANCE Shri S. P. Majumdar, Advocate for the Appellant (s) Shri M. B. Bal, JDR for the Department SP-986/09 & Ex.Appl.No.701/09 Arising out of Order-in-Appeal No.44/Hal/2009 dated 17.9.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s East India Confectionaries Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Haldia.
RESPONDENT (S) APPEARANCE Shri Arijit Chakraborty, Advocate for the Appellant (s) Shri M. B. Bal, JDR for the Department SP-1002/09 & Ex.Appl.No.715/09 Arising out of Order-in-Appeal No.18/Kol.I/2009 dated 30.9.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s Hussain Brothers APPELLANT(S) VERSUS Commr. of Central Excise, Kolkata I. RESPONDENT (S) APPEARANCE Shri D. K. Dutta, Consultant for the Appellant (s) Shri M. B. Bal, JDR for the Department SP-1008/09 & Ex.Appl.No.720/09 Arising out of Order-in-Appeal No.66/Hal/2009 dated 16.10.2009 passed by Commr. of Central Excise (Appeals) Kolkata. M/s SWAL Corporation Ltd.
APPELLANT(S) VERSUS Commr. of Central Excise, Haldia.
RESPONDENT (S) APPEARANCE Shri A. C. Tikader, Consultant for the Appellant (s) Shri M. B. Bal, JDR for the Department For approval and signature:
SHRI S. S. KANG, HONBLE VICE PRESIDENT SHRI S. K. GAULE, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy of the Order? :
4. Whether Order is to be circulated to the Departmental Authorities? :
CORAM:
SHRI S. S. KANG, HONBLE VICE PRESIDENT SHRI S. K. GAULE, HONBLE TECHNICAL MEMBER Date of hearing & decision : 29. 03. 2010 ORDER NO.. Per S. S. Kang :
Heard both sides.
2. A common issue is involved in all the appeals. Accordingly, the same are being taken up together for disposal.
3. The applicants filed these stay petitions for waiver of predeposit amounts in dispute. The appeals filed by the appellants were dismissed by the Commissioner (Appeals) vide different orders for non-compliance with the provisions of Section 35F of the Central Excise Act, 1944 as the appellants failed to comply with the condition imposed in the stay orders. The contention of the appellants is that the Commissioner (Appeals) passed an order on the application for waiver of predeposit without affording an opportunity of hearing to the appellants and thereafter, dismissed the appeals that too without affording an opportunity of hearing to the appellants. The appellants relied upon the decisions of the Honble Madras High Court in the case of ITC Ltd. Vs. Commissioner of Central Excise (A), Chennai reported in 2001 (127) ELT 338 (Mad.) and the Honble Delhi High Court in the case of J. T. (India) Exports Vs. Union of India reported in 2002 (144) ELT 288 (Del.).
4. The Revenue relied upon the decision of the Honble Supreme Court in the case of Union of India Vs. Jesus Sales Corporation reported in 1996 (83) ELT 486 (S.C.) to submit that the Commissioner (Appeals) is competent to pass an order on the application of waiver of predeposit without affording an opportunity of hearing to the applicants.
5. We find that the decision of the Honble Supreme Court in the case of Jesus Sales Corporation (cited supra) relied upon the Revenue is considered by the Honble Madras High Court in the case of ITC Ltd. (cited supra) and held that under Section 35F of the Central Excise Act, the opportunity of hearing is necessary before passing an order on application of predeposit. The same view is taken up by the Honble Delhi High Court in the case of J. T. (India) Exports (cited supra). The Honble Madras High Court in the case of ITC Ltd. (cited supra) held as under :
68. Much reliance had been placed by the Central Board in the decision of the Apex Court in Union of India Vs. Jesus Sales Corporation reported in (1996) 4 Supreme Court Cases (69), N. P. Singh, J. while disposing of the Civil appeal held that mere failure to afford an opportunity of hearing an application for stay/dispense with predeposit , on the facts of the said case, it was held that the order is not vitiated and is not liable to be quashed being violative of principles of natural justice. The said pronouncement of the Apex Court has to be confined to the facts of the said case and nowhere the Apex Court in the said case has ruled that the principles of natural justice or audi alteram partem will have no application in respect of an application for stay/exemption before the appellate authority.
69. In my considered view, their Lordships have not laid down that it is not necessary or it an universal rule that the principles of audi alteram partem is excluded in respect of such exemption/stay application. In this background of the said case and with reference to terminology employed in Section 4 (M)(2).
In this background, it is difficult to hold that if the appellate authority has rejected the prayer of the appellant to dispense with the deposit unconditionally or has dispensed with such deposit to some conditions without hearing the appellant, on perusal of the petition filed on behalf of the appellant for the said purpose, the order itself is vitiated and is liable to be quashed being violative of the principles of natural justice. (Emphasis supplied) With respect of their Lordships, this Court is of the considered view that by this pronouncement, the Apex Court has not excluded the applicability of the principles of natural justice in respect of stay/exemption application. In my considered view, such an inference by the respondents is neither called for nor it could be sustained. Besides such a proposition which is too wide will offend Article 14 and deprive a right of appeal.
70. Proviso to Section 35F of the Central Excise Act provides that the Commissioner (Appeals) if he is of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person he may dispense with such deposit subject to such condition as he may deem fit to impose. It is true that the said proviso emphasize that the appellate authority shall safeguard the interests of the revenue.
71. The Appellate Authority is required to examine as to whether in a given case, deposit of duty demanded or penalty levied would cause undue hardship to the appellant before it and also has to decide with reference to the facts of each case as to rate or quantum or extent, to which such predeposit could be dispensed with and also subject to such conditions as the said Appellate Authority may impose and deem fit. All these aspects have to be taken care of by the Commissioner (Appeals).
72. It is not as if Section 35F excludes the applicability of principles of natural justice and it is not as if that the entire duty demanded or penalty levied has to be deposited without there being any exception. It may be that proviso could be considered as an exception and not as a general rule, but when an appeal is filed, it is in respect of a disputed tax and/or penalty. If such disputed tax/penalty is not remitted, the resultant position is the appeal stands rejected, which is the order passed in the present case.
73. According to the impugned orders, if the disputed duty/penalty is not deposited and direction is issued if not complied with within a period of two/three weeks, the appeal is liable to be rejected for non-compliance with Section 35F of the Central Excise Act. Hence, as a result of either failure to comply with the direction or failure to deposit the disputed tax/penalty, remedy of appeal is denied and the entire statutory appeal provision is frustrated or rendered nugatory as has been held by the Supreme Court in Income Tax Officer Cannanore Vs. M. K. Mohammed Kunhi reported in AIR 1969 Supreme Court (430). Hence, discretion has to be exercised fairly and reasonably depending upon each case or contentions raised therein as the case may be. This would mean that the Commissioner (Appeals) has to apply his mind and his order of rejection of stay/exemption application as it frustrates the remedy of appeal and render statutory appeal provision nugatory, it is needless to exphasize that such an approach will defeat the very statutory remedy of appeal and an assessee who is unable to pay the disputed tax/penalty even for bona fide reasons or reasons beyond his control will be denied of a valuable right of appeal as the non-compliance leads to rejection of the appeal resulting in infraction of constitutional guarantees.
74. In practice, the application for stay is not taken up on the day on which the appeal is presented before the Commissioner (Appeals). Application for stay is taken up after several months from the date of presentation of application and in the meantime, there are some developments. In some cases, error might have crept in calculation in arithmetics and in some cases, the appellant might have paid substantial amount or there might have been an order of exemption or waiver which the Original Authority might not have taken into consideration or referred. If an opportunity of hearing is given while taking up the application for exemption/stay, it would enable the appellant before the Commissioner (Appeals) to produce some materials or such material including subsequent developments which may justify grant of full exemption or exemption in part on the peculiar circumstances of the case. This has to be taken note of as failure to remit the disputed tax or penalty results in rejection of the appeal which is an infraction of Article 14 of the Constitution.
6. The Honble Delhi High Court in the case of J. T. (India) Exports (cited supra) held as under :
14. Even if grant of an opportunity is not specifically provided for it has to be read into the unoccupied interstices and unless specifically excluded principles of natural justice have to be applied. Even if a statute is silent and there are no positive words in the Act or Rules spelling out the need to hear the party whose rights and interests are likely to be affected, the requirement to follow the fair procedure before taking a decision must be read into the statute, unless the statute provides otherwise. Reference is accordingly disposed of.
7. In view of the above decisions, we find merit in the contention of the appellants that the impugned order was passed in violation of principles of natural justice. Hence, after waiving the predeposit of amounts in disputes, impugned orders are set aside. The matters are remanded to the Commissioner (Appeals) to decide afresh the applications for waiver of predeposit of amounts in dispute and after affording an opportunity of hearing to the appellants and thereafter to decide the appeals in accordance with law. All the appeals are disposed off by way of remand. The stay petitions also disposed off in the same terms.
(Dictated and pronounced in the open Court)
Sd/ Sd/
( S. K. GAULE) ( S. S. KANG )
TECHNICAL MEMBER VICE PRESIDENT
mm
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Ex. Appeal Nos.558,580-581,592,593,595,619,
659,675,694-695,696,701,715 & 720/09