Bombay High Court
B.D. Steel And Traders vs Union Of India on 3 November, 1997
Equivalent citations: 1998(103)ELT220(BOM)
ORDER
1. On request of learned Counsel for the respective parties, Rule is made returnable forthwith and the petition is taken up for final disposal.
2. The petitioner is a SSI unit and holder of Central Excise licence No. J12/CH. 72/46/94 and manufacturer of Iron and Steel Products falling under Chapter Heading Nos. 72 and 73 of Central Excise Tariff Act, 1985, and availing the exemption benefit as per the Notification No. 1/93, dated 28-2-1993. According to the petitioner, it being a SSI unit is entitled for the benefit of exemption under Notification No. 1/93 and availed deemed Modvat credit to the tune of Rs. 7.85 lacs from November, 1994 to April, 1995 on re-rolling iron and steel ingots used as an input under Rule 57G(2) in pursuance of Government of India (Ministry of Finance) Order No. TS/36/94-TRU, dated 1-3-1994.
3. The Superintendent of Central Excise and Customs, Jalna, however, issued a show cause notice to the petitioner requiring it to show cause why inadmissible deemed credit to the tune of Rs. 1,25,906.60 Ps. as availed and utilised the same towards the payment of duty during, as per the details given in the annexure attached to the notice, shall not be disallowed and recovered the same from the petitioner as per the provisions of Rule 57-I of the Central Excise Act (sic), 1944, and as to why penalty shall not be imposed as per the provisions of Rule 173Q of the said Rules.
4. The petitioner filed its reply denying the facts alleged and reiterated his entitlement under the deemed Modvat credit.
5. It appears that the petitioner was not represented and the respondent No. 4 passed ex parte order confirming the demand of Rs. 7.85 lacs and also imposed penalty of Rs. 50,000/- under Rule 173(2) of the said Rules.
6. Aggrieved by the said order, the petitioner filed an appeal bearing No. O.I.A. 107/1996 under Rule 35 of the said Rules, Said appeal, however, came to be dismissed in default.
7. The petitioner submits that the appeal was dismissed solely on account of non-compliance of the directions during the pendency of the appeal and, therefore, the authority below, according to the petitioner, has failed to exercise power as the appellate authority in accordance with law. It is submitted that during pendency of the appeal, after hearing, the respondent No. 2 appellate authority granted conditional stay subject to deposit of Rs. 2,00,000/- within two months. It is submitted that assuming that condition was not fulfilled that does not necessarily mean that the appeal ought to be dismissed for non-compliance of the said condition. Therefore, the petitioner submits that the impugned order dismissing the appeal is not proper in law and same may be set aside.
8. We have heard Shri Sharma, learned Counsel for the petitioner and Shri Varma, learned Counsel for the respondent Union of India. We have also perused the return filed on behalf of the Respondent No. 4.
9. In the reply, it is stated that the appeal of the petitioner was dismissed for his own fault and now, the petitioner is estopped from making any grievance against the order passed by the Tribunal. It is further stated that the contention of the petitioner based upon the judgment relied upon by it cannot be accepted since the order of Tribunal dated 19-2-1997 is a result of non-appearance of the petitioner for hearing of the appeal before Tribunal. Because of non-compliance of the Tribunal's order, dated 19-6-1996 present order came to be passed.
10. It is, therefore, clear that the impugned order came to be passed without hearing the petitioner. Dismissal of its appeal simplicitor for non-compliance of the condition for grant of stay, we feel, has no relation with dismissal of appeal in default. The Tribunal ought to have decided the appeal on merits. Since there is failure of principles of natural justice the impugned order is liable to be set aside and the matter requires to be remanded to the appellate authority for disposal in accordance with law.
11. In the result, writ petition is allowed. The order passed by the Tribunal in appeal is set aside and the appeal is restored to file. The appellate Tribunal is directed to dispose of the appeal in accordance with law, as expeditiously as possible, on hearing the petitioner on merits of the case.
12. Rule is accordingly made absolute. No order as to costs.