2004 (7) TMI 578 - AT - Central Excise

Summary

Issues Involved:
Appeal against demand of duty and penalty, application under Section 35F for waiver of pre-deposit, dismissal of appeal by Commissioner (Appeals) for non-compliance with Section 35F, consideration of modification application, violation of natural justice.

Analysis:

1. Confirmation of Demand and Penalty:
The original authority confirmed a demand of duty and imposed a penalty on the appellants. Subsequently, an appeal was filed to the Commissioner (Appeals) along with an application under Section 35F for waiver of pre-deposit and stay of recovery.

2. Dismissal of Appeal by Commissioner (Appeals):
The Commissioner (Appeals) dismissed the appeal on the grounds of non-compliance with Section 35F of the Central Excise Act, 1944. The appellants had not made the pre-deposit of Rs. 3 lakhs as directed by an interim order dated 26-5-2003. The dismissal was solely based on this non-compliance without considering the merits of the modification application filed by the appellants.

3. Violation of Natural Justice:
Upon review, it was found that the Commissioner (Appeals) did not consider the modification application before dismissing the appeal. The failure to provide the appellants with an opportunity to explain the non-compliance with Section 35F and the subsequent dismissal without allowing them to press their plea for modification violated the principles of natural justice.

4. Decision and Directions by the Tribunal:
The Tribunal set aside the impugned order and allowed the appeal by way of remand. The Tribunal directed the Commissioner (Appeals) to first dispose of the modification application on its merits after giving the appellants a reasonable opportunity to be heard. Only after this process, the Commissioner (Appeals) was instructed to proceed to deal with the appeal in accordance with the law and principles of natural justice.

In conclusion, the judgment highlighted the importance of considering applications on their merits, providing opportunities for parties to be heard, and ensuring compliance with procedural requirements while upholding principles of natural justice in legal proceedings.