2012 (9) TMI 242 - HC - Central Excise

Maintainability of appeal - appeal under Section 35G of the Central Excise Department of 1944 Held that - Appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, in case, High Court is satisfied that the case involves a substantial question of law - no substantial question of law is involved in the present case, which may require for interference by this Court under Section 35G of the Act appeal dismissed

Issues Involved:
1. Opportunity of hearing regarding undue hardship under Section 35F of the Central Excise Act.
2. Compliance with principles of natural justice.
3. Interpretation of Section 35F regarding pre-deposit requirements.
4. Applicability of precedents and judicial interpretations.

Issue-Wise Detailed Analysis:

1. Opportunity of Hearing Regarding Undue Hardship:
The appellant argued that no opportunity of hearing was provided concerning undue hardship on the application moved under Section 35F of the Central Excise Act. The adjudicating authority's rejection of the application without a hearing was claimed to violate principles of natural justice. The court noted that the appellant had the chance to appear before the Commissioner (Appeals) but failed to do so. The court emphasized that it was incumbent upon the appellant to bring this to the appellate authority's attention, which was not done.

2. Compliance with Principles of Natural Justice:
The appellant contended that a reasonable opportunity of hearing should have been given by the competent authority while passing the order under Section 35F. The court referred to the Supreme Court's decision in Union of India v. Jesus Sales Corporation, which held that it is not necessary to provide an opportunity of hearing while considering undue hardship under Section 35F. The Supreme Court stated that principles of natural justice do not always mandate a personal hearing, and an order passed after considering the points raised in the appeal or application is valid even without a personal hearing.

3. Interpretation of Section 35F Regarding Pre-Deposit Requirements:
The court examined Section 35F, which requires the appellant to deposit the duty demanded or penalty levied pending appeal. The provision allows the appellate authority to dispense with such deposits if undue hardship is demonstrated. The court noted that the statutory provision does not mandate an opportunity of hearing before passing an order under this section. The court concluded that the appellate authority had considered the appellant's undue hardship by directing a 20% deposit, indicating that the authority applied its mind to the material on record.

4. Applicability of Precedents and Judicial Interpretations:
The appellant relied on the Madras High Court's judgment and the Supreme Court's decisions in Benara Valves Ltd. v. Commissioner of Central Excise and Dinesh International Ltd. v. Union of India. The court distinguished these cases, stating that in Benara Valves, the Supreme Court emphasized the need for a reasoned order while considering undue hardship. However, the court found that the appellant did not initially contest the original order under Section 35F but only later sought a waiver of the 20% deposit. The court held that the appellate authority had rightly rejected the waiver application without providing a hearing, as it had already considered the appellant's undue hardship. The court also found that the Dinesh International judgment did not apply to the present case's facts.

Conclusion:
The court concluded that no substantial question of law was involved, and the controversy was based on factual findings. The appeal was dismissed, but the court provided that if the appellant deposits the pre-deposit amount within one month, the appellate authority may hear the appeal on merits expeditiously.

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