2011 (12) TMI 190 - HC - Central Excise

Consistency in rendering judgments or passing interim orders pre-deposit directed on assessee vide order dated 07.09.2011 on 8.9.2011, in an identical issue (Vasantham Enterprises), Tribunal dispensed with the condition of pre-deposit of duty and penalty and the stay petition was allowed un-conditionally petitioner seeking recall of order dated 7.9.2011 - application rejected on ground that it was the discretion of the Tribunal to pass interim orders and it was not a fit case for exercise of power under Rule 41 of the CESTAT (Procedure), Rules, 1982 - Held that - Discretion is not an arbitrary discretion. Tribunal should have invoked the power under Rule 41, once a petition producing also the order passed in Vasantham Enterprises, was brought to the notice of the Tribunal, in the interest of justice and for securing the ends of justice. While dealing with the application, twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. Undue hardship - held that - As held by the Apex Court in Benara Valves Ltd case (2006 -TMI - 866 - SUPREME COURT OF INDIA), the undue hardship to the person is a relevant factor to be taken into consideration under Section 35 F of the Act. Therefore, order of Tribunal is set aside and Tribunal is directed to consider Annexure P-16, stay application, referring to all relevant factors, referred to above, and pass fresh orders. Decided in favor of petitioner.

Summary

Issues involved:
Inconsistency in judicial orders, exercise of discretion in passing interim orders, application of Rule 41 for securing justice, guiding principles for passing interim orders under Section 35 F of the Act.

Analysis:

1. Inconsistency in Judicial Orders:
The judgment emphasizes the importance of consistency in rendering judgments and passing interim orders to maintain the integrity and fairness of the judicial system. Inconsistent orders can lead to a perception of discrimination and unfairness, eroding public trust in the legal system. The court cites examples where inconsistent orders by judicial officers have been criticized for undermining the rule of law and causing litigants to feel discriminated against.

2. Exercise of Discretion in Passing Interim Orders:
The court discusses the discretionary power of judicial forums in passing interim orders, highlighting that such discretion should be based on reasons, objectivity, and transparency. Arbitrary exercise of power is cautioned against, emphasizing the need for consistency and fairness in judicial processes. The judgment cites legal precedents and principles to underscore the importance of consistency in passing interlocutory orders.

3. Application of Rule 41 for Securing Justice:
The court delves into the application of Rule 41 of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982, as an inherent power vested with the Tribunal to secure the ends of justice. The judgment references a Supreme Court case to illustrate that the Tribunal has the authority to set aside orders passed ex parte if it finds sufficient cause for the party's inability to appear. The court stresses the importance of invoking Rule 41 to ensure fairness and justice in legal proceedings.

4. Guiding Principles for Passing Interim Orders under Section 35 F of the Act:
The judgment provides a detailed analysis of the guiding principles for passing interim orders under Section 35 F of the Act, citing legal precedents and key considerations such as undue hardship to the party seeking relief and safeguarding the interests of revenue. The court emphasizes that interim relief should not be denied if it may lead to public mischief or grave irreparable private injury. Financial hardships and prima facie merits of the case are highlighted as relevant factors to be considered while passing interim orders.

In conclusion, the court sets aside the impugned orders and directs the Tribunal to reconsider the stay application, taking into account all relevant factors and ensuring a fair hearing for the petitioners. The judgment underscores the importance of consistency, fairness, and adherence to legal principles in judicial decision-making to uphold the credibility and trust in the legal system.