2013 (6) TMI 1 - HC - Central Excise

Whether or not Opportunity of being heard to be provided before deciding the prayer for waiver of pre-deposit condition provided under the proviso to Section 35 of the Central Excise Act, 1944 and for passing the interim order of stay. - held that - one is not wise who claims that he is wise. One is wise who makes efforts to become more wise. We are constrained to observe as above because of the reason that if Commissioner (Appeals) Central Excise & Service Tax, Ranchi was of the view that he correctly understood the judgment of M/s. Jesus Sales Corporation Ltd. 1996 (3) TMI 194 - SUPREME COURT OF INDIA and decided the matter without affording opportunity of hearing to the writ petitioner then, it was the heavy duty upon him to update himself with the laws as the said authority himself took the task of deciding the matter without the assistance of the applicant before him and, therefore, the law laid down by the Hon ble Supreme Court and which has already been interpreted by the various High Courts should not have been ignored, if he updated his knowledge by reading the judgments referred above wherein case of M/s. Jesus Sales Corporation Ltd. 1996 (3) TMI 194 - SUPREME COURT OF INDIA has been considered and it has been held that M/s. Jesus Sales Corporation Ltd. case has not barred hearing of applicant seeking relief of waiver of condition of pre-deposit, and if the Commissioner (Appeals) C.E. & S.T., Ranchi had no knowledge of those judgments then he is certainly guilty of not keeping himself updated in case where, according to him, he has been given power to decide application having civil consequences, without following principles of natural justice and finding out one old judgment i.e., the judgment delivered in the case of M/s. Jesus Sales Corporation Ltd. which he interpreted in the manner in which he wanted to interpret. Commissioner (Appeals) Central Excise & Service Tax, Ranchi has committed gross error of law in denying the opportunity of hearing to the writ petitioner and because of his act, the proceedings have been delayed in the matter of involvement of the revenue of the Government, as claimed by the Government.

Summary

Issues Involved:
Opportunity of hearing before passing orders under Section 85 of the Finance Act, 1994 read with Section 35F of the Central Excise Act, 1944 for waiver of pre-deposit condition.

Analysis:
The petitioner challenged the order passed by the Commissioner (Appeals) Central Excise & Service Tax, Ranchi, which denied the petitioner's request for waiver of deposit without providing an opportunity of hearing. The Commissioner relied on a Supreme Court judgment in the case of M/s Jesus Sales Corporation Ltd., stating that no hearing was necessary for deciding on the waiver of pre-deposit condition. However, the petitioner argued that various High Courts have emphasized the importance of natural justice principles, including the right to be heard, even when statutes are silent on the matter. The petitioner cited cases like J.T. (India) Exports v. Union of India and Eveready Industries India Ltd. v. Union of India to support the requirement of fair procedure and opportunity of hearing in such cases.

The petitioner pointed out that despite previous directions from the High Court to provide a hearing in similar cases, the Commissioner proceeded to pass an ex parte order in the present case, showing disregard for judicial propriety. The Court emphasized the importance of keeping updated with legal precedents and principles of natural justice. The judgment highlighted the duty of authorities to act fairly and follow established legal principles, especially in matters with civil consequences. The Court criticized the Commissioner for not referencing previous court decisions that emphasized the need for a hearing before deciding on waiver requests.

In a related case involving M/s. Panch Sheel Udyog, the Commissioner had initially passed an ex parte order allowing a partial deposit, but upon being directed by the High Court to provide a hearing, the subsequent order was more stringent, indicating inconsistency in decision-making without hearings. The Court noted that the Commissioner's actions reflected a negative attitude towards litigants and could result in revenue loss due to hasty decisions without proper hearings. The judgment concluded that the Commissioner's order was illegal and contrary to law, setting it aside and directing a fresh decision within three months with a stay on the pre-deposit requirement during this period.

In light of the delays caused by the Commissioner's actions, the Court followed the precedent set by the Rajasthan High Court in Autolite (India) Ltd. v. Union of India and directed the Commissioner to expedite the appeal process within three months while refraining from enforcing the pre-deposit requirement during this period. The Court stressed the importance of providing a copy of the order to the concerned authority promptly.