Customs, Excise and Gold Tribunal - Delhi
J.K. Synthetics Limited vs Collector Of Central Excise on 21 April, 1988
Equivalent citations: 1988(17)ECC149, 1988(17)ECR10(TRI.-DELHI), 1988(36)ELT165(TRI-DEL)
ORDER
S.D. Jha, Vice-President (J)
1. This order disposes of the respondent-applicants application under Rule 41 of the CEGAT (Procedure) Rules, 1982 for recalling the order dated 31-8-1987 passed ex-parte in absence of the applicant.
2. For proper appreciation of the facts and issues involved, a brief history leading to the present application appears necessary. Revenue's Appeal No. 590/84-C, parties Collector of Central Excise, Jaipur v. J.K. Synthetics Ltd. was on respondent's request, adjourned from 24-8-1987 to 31-8-1987. On 31-8-1987 when the appeal was called for hearing, none was present for the respondents. The Tribunal proceeded ex-parte against the respondent and heard Smt. J.K. Chander, Departmental Representative for the appellant-Collector of Central Excise, Jaipur.
3. Relying on a Five Member Bench decision of the Tribunal, the order of the Collector (Appeals) challenged before the Tribunal, was set aside in so far as it related to refund; in respect of cartons. In respect of cones, it was confirmed. As respect other packing materials, the claim for refund was ordered to be examined in the light of Five Member Bench decision of the Tribunal referred to in the order. The order was dictated in open Court and announced. Substance of the same was reduced to writing on the order sheet under signature of the three Members constituting the Bench. Soon thereafter, one Shri Lilapat, appeared at 11.30 A.M. and orally requested that Shri Ravinder Narain, Advocate representing the respondents, had been held up in Delhi High Court and would soon be reaching the Tribunal. Shri Lilapat was informed that the matter was already taken up for hearing and order dictated. After sometime when the Bench had risen, Shri Revinder Narain learned Advocate for the respondent, met the Vice-President (Judicial) in his chambers and explained the circumstances under which he was delayed in being present before the Tribunal when the matter was taken up for hearing. He orally made a request for recall of the order passed ex-parte and hearing the same on merits on the respondent's case. Shri Ravinder Narain was called upon to make his request in writing and present the same to the Tribunal. He was also informed that he may mention the matter to other Members in the Chambers.
4. On the same day, present application under Rule 41 of CEGAT (Procedure) Rules, 1982 was filed praying recalling the order ex-parte dated 31-8-1987 and to direct further hearing of the appeal before final disposal of the appeal and to pass such other and further orders, as may be just and necessary. The application also in substance recites the history as already set out above by us.
5. At the hearing of the application, Shri Ravinder Narain,, Advocate for the applicants, explained as to how he was held up in High Court. He could not have foreseen that the appeal would be called for hearing at an early hour of the day because two stay matters were also fixed for hearing on the same day. He also submitted that in High courts whenever such a contingency arises, the order is recalled. According to him, Rule 41 of CEGAT (Procedure) Rules, 1982 confers wide power on the Tribunal and on the facts and history set out above, in exercise of the powers vested by the Rule, the Tribunal should recall the order to secure the ends of justice. No precedent in support of the plea was cited by him during arguments.
6. Shri Sunder Rajan, learned Departmental Representative, representing the non-applicant, while submitting that he would have no objection to the order being recalled, stated that Tribunal in view of Rules 20 and 21 of CEGAT (Procedure) Rules, 1982 had no power to recall or set aside such an order passed on merits in absence of the respondents. Unlike the power to restore an appeal dismissed in default for appellants absence, there was no provision for setting aside an order passed ex-parte in absence of the respondents on the date of hearing inspite of notice. In view of this legal position, he submitted that Rule 41 could not be pressed in aid to recall or set aside the order as urged by Shri Ravinder Narain. He also did not cite any decision in support of his arguments.
7. The question thus arising for determination is whether the Tribunal has jurisdiction to set aside or recall an order passed ex-parte in absence of the respondents inspite of notice and whether in such a situation, the inherent powers of proviso under Rule 41 can be invoked to recall the order.
8. Rules 20 and 21 of CEGAT {Procedure) Rules which are verbatim reproductions of Rules 24 and 25 of the Income-tax (Appellate Tribunal) Rules, 1963, are reproduced below :-
"20. Action to 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 after-wards and satisfies the Tribunal that there was sufficient' cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall made an order setting aside the dismissal and restore the appeal."
"21. Hearing of appeals ex-parte -
Where on the day fixed for hearing of the appeal or on any other day to which the hearing is adjourned the appellant appears and the respondent does not appear when the appeal is called on for hearing, the Tribunal may hear and decide the appeal ex-parte."
Rule 41 of CEGAT (Procedure) Rules, 1982 is also reproduced below -
"41. Orders and directions in certain cases -
The Tribunal may make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice."
From Rules 20 and 21 reproduced above, it would be seen that whereas proviso to Rule 20 provides for restoration of the appeal dismissed in default on sufficient cause being shown, there is no such provision with respect to an appeal heard ex-parte in absence of the respondent under Rule 21. This position was also not disputed by the parties at the time of hearing.
8A. It would also be noticed that there is no provision like Order No. 9, Rule 13 providing for setting aside a decree passed ex-parte against defendent or Order No. 41, Rule 21 of Code of Civil Procedure for rehearing of an appeal on application by respondent against whom ex-parte decree has been made.
9. What is now to be seen is what is the nature and true character or the order which the Tribunal passes when it decides an appeal in absence of the appellant. In Commission of Income-tax, Madras v. S. Chenniappa Mudaliar (1969 74 ITR P.41), an appeal by certificate from judgment of Special Bench of Madras High Court, there are certain observations which threw light on the nature of character of order which the Tribunal should pass on an appeal presented to it. The Supreme Court was concerned with Rule 24 of the Appellate Tribunal Rules, 1946 when the provision for restoring an appeal dismissed for default was not there. As is the situation with respect to Rule 21 of CEGAT (Procedure) Rules, 1982 or Rule 25 of the Income-tax (Appeallte Tribunal) Rules, 1963. The Hon'ble Supreme Court affirmed the decision of the Hon'ble Madras High Court. The Supreme Court decision extracts the material portion of the Madras High Court, Special Bench decision, which is in the following words -
"To sum up the position, the Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to assessment of Income-tax. Its composition, consisting as it does of qualified persons in law and accountancy, makes it peculiarly qualified to deal with all questions raised in a case, whether there be assistance from the party or his counsel or. not. Section 33(4) obliges it to decide an appeal, after giving an opportunity to parties to put forward their case. The giving of the opportunity only emphasises the character of the quasi-judicial function performed by the Appellate Tribunal. The fact that that opportunity is not availed of in a particular case, will not entitle the Tribunal not to decide the case. There can be no decision of the case on its merits if the matter is to be disposed of for default of appearance of the parties. Further an adjudication on the merits of the case is essential to enable the High court to perform its statutory duty and for the Supreme Court to" hear an appeal filed under Section 66A. Section 33(4) itself indicates by the use of word 'thereon that the decision should relate to the subject-matter of the appeal. Rule 24, therefore, to be consistent with Section 33(4) could only empower the Tribunal to dispose of the appeal on its merits whether there be an appearance of the party before it or not. This was indeed the rule when it was first promulgated in the year 1941. The rule in its present form, as amended in the year 1948, in so far as it enables the dismissal of an appeal before the Income-tax Appellate Tribunal for default of appearance of the appellant, will, therefore, be ultra vires, as being conflict with the provision of Section 33(4) of the Act."
Section 35C(1) of Central Excises and Salt Act, 1944 and Section 35D ibid read with Section 129C of Customs Act, 1962 show that the statutory position dealt with by Madras High Court was substantially the same as now obtaining in this Tribunal. Therefore, even if respondent Was not present when the appeal was called for hearing, would not absolve the Tribunal from deciding the appeal on merits on the basis of material on record. That in fact the Tribunal did. The decision taken by the Tribunal in the absence of the respondent is not an ex-parte decision or decree as understood under the Code of Civil Procedure or in a Civil Court, and if it is a decision on merits, we fail to see how we can review or set aside the same. Recalling the order passed on merits would in fact amount to setting aside or reviewing an order decided on merits. In doing so, the Tribunal would be exercising a power which is not vested in it by law. We do not think that in such a situation Rule 41 of CEGAT (Procedure) Rules, 1982 could be pressed into aid by the applicant in support of their request for recalling the order.
10. We, therefore, reject the application. Earlier, issue of our order dated 31-8-1987 was held up due to Shri Ravinder Narain's request for recall of the order. It shall now be communicated to the parties alongwith this order.