1999 (8) TMI 902 - AT - Central Excise

Summary

Issues Involved:
1. Whether the appeal filed against the impugned order dated 12-4-1999 by Commissioner (Appeals) is legally maintainable.

Detailed Analysis:

Issue 1: Legal Maintainability of the Appeal Against the Impugned Order

The core issue revolves around the legal maintainability of the appeal filed against the impugned order dated 12-4-1999 by the Commissioner (Appeals), which was contested based on the preliminary objection raised by the learned SDR.

Facts:
The appellant, engaged in the manufacture of iron and steel washers, availed Modvat credit on inputs. The preventive staff of the Central Excise Division inspected the appellant's unit and found discrepancies, leading to a show cause notice for contravening various provisions of the Central Excise Rules, 1944. The Additional Commissioner directed the appellant to pay Rs. 17,19,400/- and imposed an equal penalty. The appellant's appeal to the Commissioner (Appeals) was dismissed for failing to make the pre-deposit as directed.

Contentions:
The learned SDR argued that the appeal against the impugned order was not tenable as it was passed under Section 35F of the Central Excise Act, which does not provide for an appeal to the Tribunal. The appellant's counsel contended that the order should be appealable under Section 35A, as it effectively dismissed the appeal.

Legal Framework:
- Section 35F of the Central Excise Act: Mandates pre-deposit of duty or penalty for an appeal to be heard, with a proviso allowing the appellate authority to dispense with the deposit under certain conditions.
- Section 35A: Outlines the procedure for the Commissioner (Appeals) to dispose of appeals.
- Section 35B: Specifies the orders of the Commissioner (Appeals) that are appealable to the Tribunal.

Judicial Precedents:
- Vijay Prakash, D. Mehta v. Collector of Customs: Affirmed that the right to appeal is statutory and conditional.
- Network Ltd. v. CCE: Reiterated the statutory nature of the right to appeal.

Analysis by Member (J):
The Member (J) upheld the preliminary objection, emphasizing that the right to appeal is conditional upon fulfilling the pre-deposit requirement under Section 35F. The order dismissing the appeal for non-compliance with Section 35F does not fall under Section 35A and thus is not appealable under Section 35B.

Analysis by Vice President:
The Vice President disagreed, arguing that the impugned order, which disposed of the appeal due to non-compliance with the pre-deposit direction, should be considered an order under Section 35A. He emphasized that dismissing the appeal for non-compliance with Section 35F is a reason for the dismissal, not the nature of the order itself. He highlighted that the Tribunal has historically entertained such appeals and that denying this would undermine the Tribunal's jurisdiction and flood the High Courts with writ petitions.

Third Member's Analysis:
The Third Member concurred with the Vice President, noting that the impugned order, being a final order disposing of the appeal, should be treated as an order under Section 35A. He referenced various High Court decisions supporting the view that such orders are appealable. The Third Member emphasized that the finality of the order, irrespective of the reason for dismissal, makes it appealable.

Conclusion:
The appeal is maintainable. The Tribunal should proceed to hear the stay petition and the appeal on merits.