2017 (2) TMI 1280 - HC - Central Excise

Natural justice - CENVAT credit - input - Whether Tribunal was justified in deciding appeal ex parte and also dismissing recall application? - Held that - it would be appropriate if Tribunal is directed to decide appeal afresh after hearing counsel for appellant - In view thereof but subject to payment of cost of ₹ 25,000/- within one month, we allow this appeal, set aside orders dated 28.07.2011 and 12.11.2013 passed by Tribunal impugned in this appeal and answer the aforesaid question in favour of Assessee - decided in favor of appellant.

Summary

Issues:
1. Appeal under Section 35-G of Central Excise Act, 1944 arising from ex parte decision by Tribunal.
2. Justification of Tribunal's decision in dismissing recall application.
3. Dispute over items as "Input" for CENVAT credit entitlement.
4. Application rejection by Tribunal for delay in appearance.
5. Applicability of Jaypee Rewa Plant Vs. CCE, Raipur judgment.
6. Direction for Tribunal to decide appeal afresh after cost payment.

Analysis:
1. The appeal before the High Court stemmed from a judgment and order by the Customs, Excise and Service Tax Appellate Tribunal, where the Assessee's appeal was decided ex parte due to absence of counsel, and a subsequent application for recall was also dismissed.
2. The main issue raised in the appeal was whether the Tribunal was justified in deciding the appeal ex parte and in dismissing the recall application.
3. The dispute revolved around the classification of certain items like Welding Electrodes, S.S. Coil, M.S. Angle, M.S. Channels, and Joists as "Input" for claiming CENVAT credit.
4. The Assessee's absence during the hearing led the Tribunal to rely on a previous judgment related to Welding Electrodes only, which raised concerns about the applicability of the judgment to other items in question.
5. Despite the Assessee's explanations for the delay in appearance, the Tribunal rejected the applications for recall, emphasizing the need to proceed with the case promptly.
6. The High Court, considering the limited scope of the previous judgment and the developments in similar cases since then, directed the Tribunal to rehear the appeal after the Assessee pays a cost of ?25,000 within a month, with a strict timeline for the Tribunal to resolve the matter within two months of the High Court's order.