2008 (7) TMI 821 - AT - Central Excise

Summary

Issues:
1. Application for recalling ex parte Final Order
2. Contention regarding penalty imposition
3. Power of Appellate Tribunal to set aside ex parte order

Analysis:

Issue 1: Application for recalling ex parte Final Order
The applicant filed an application seeking to recall the ex parte Final Order dated 11-4-2008, citing the absence of their counsel due to a prior commitment at the Delhi High Court. The applicant relied on the decision of the Hon'ble Supreme Court in J.K. Synthetics Ltd. v. CCE to support their argument that the ex parte order should be set aside when a party is unable to appear for a valid reason. The Tribunal, after considering the reasons provided by the applicant, found merit in their contention and recalled the Final Order to the extent of the leviability of penalty only.

Issue 2: Contention regarding penalty imposition
The applicant, while not contesting the demand based on a decision by a Larger Bench, argued against the imposition of penalty. They contended that prior to the decision of the Larger Bench, there were conflicting views on the abatement in respect of durable and returnable packing. The Tribunal acknowledged the divergent views and the settlement of the issue by the Larger Bench in the case of Vikram Detergents Ltd. The Tribunal agreed with the applicant that since the period of demand in the present case was before the decision of the Larger Bench, it was not a case warranting the imposition of penalty. Consequently, the penalty imposed on the applicant was set aside.

Issue 3: Power of Appellate Tribunal to set aside ex parte order
The Tribunal referred to the judgment of the Hon'ble Supreme Court in J.K. Synthetics case, emphasizing that the Appellate Tribunal has the authority to set aside an ex parte order when there is a valid reason for a party's absence. The Tribunal reiterated that the ends of justice required that when a party is unable to appear through no fault of their own, the ex parte order should be set aside. Based on this legal principle, the Tribunal recalled the Final Order in this case due to the applicant's valid reason for the absence of their counsel.

In conclusion, the Tribunal granted the applicant's request to recall the Final Order to the extent of the leviability of penalty, citing the applicant's valid reason for their counsel's absence and the lack of a finding on penalty imposition in the original order. The Tribunal upheld the demand but set aside the penalty based on the divergent views prior to the decision of the Larger Bench.