2009 (6) TMI 673 - HC - Central Excise

Writ petition - whether the petitioner is entitled to file an application for setting aside the order and restore the appeal - respondent has passed orders on merits, even though without hearing the petitioner, due to the petitioner s non-appearance. The non-appearance of the petitioner is due to non-service of any notice of hearing - it is evident that before passing the order in the appeal, the petitioner was not heard - in the case of Sarwan Singh v. Kishan Singh (SC), held that merely because of the fact that the appeal was dismissed on merits could not be a ground to refuse restoration. The dismissed of the restoration application passed by the High Court was set aside by the Honourable Supreme Court and restoration of the second appeal was ordered, petitioner is right in contending that it is entitled to pray for setting aside of the order passed in the appeal and to hear the appeal on merits after hearing the petitioner or its counsel, writ petition is ordered on the above terms

Summary

Issues:
Challenge to order confirming final order, Modvat credit availed, Appeal dismissed without hearing, Restoration application rejected, Violation of principles of natural justice.

Analysis:
1. The petitioner sought to quash an order confirming a final order and direct the respondent to dispose of the appeal on merits. The petitioner claimed modvat credit for manufacturing medicines under different classifications for home consumption and export, based on affixing labels with logos. Show cause notices were issued for recovery of modvat credits, leading to a common order disallowing credits and imposing penalties.

2. The petitioner's appeal before the Tribunal was dismissed without a hearing, alleging a lack of notice or communication regarding the hearing date. The petitioner filed an application for restoration, which was rejected on the grounds that further appeal to the appellate Court was the remedy. The petitioner contended that the appeal's dismissal without a hearing violated principles of natural justice.

3. The petitioner argued that restoration should be allowed citing a Supreme Court decision where ex parte dismissal of an appeal can be restored with sufficient cause for absence. The respondent argued that the remedy was to file a further appeal before the High Court under the Central Excise Act since the appeal was disposed of on merits.

4. The Court considered the statutory remedy under the Central Excise Act, emphasizing the right to be heard as per Section 35-C(1). It noted that the appeal was decided without the petitioner's representation despite no notice or request for adjournment. The Court accepted the petitioner's claim of no notice being issued or served for the appeal's hearing date, highlighting the importance of the right to a hearing before the statutory authority.

5. Referring to a similar case, the Court held that when the appellant was unable to appear for sufficient cause, the appeal should be restored to secure the ends of justice. Despite the appeal being decided on merits, the Court found that the petitioner's right to be heard was violated, warranting restoration of the appeal.

6. Relying on Supreme Court precedents, the Court allowed the petitioner's plea to set aside the order and restore the appeal for a hearing on merits. The impugned orders were set aside, and the Tribunal was directed to hear the petitioner and pass orders in accordance with the law within three months.

7. The writ petition was allowed on the above terms with no costs, and the connected miscellaneous petition was closed, ensuring the petitioner's right to a fair hearing and due process was upheld.