2014 (1) TMI 1471 - HC - Central Excise

Restoration of appeal - Tribunal directed the respondent herein to make deposit of ₹ 4,00,000 within a period of 8 weeks and report compliance on 6th May, 2011 - Vide order dated 10th June, 2011 on account of non-compliance of order dated 4th February, 2011, the learned Tribunal dismissed the appeal - The respondent herein subsequently deposited an amount of ₹ 4,00,000 on 12th December, 2012 and filed an application for restoration of appeal purportedly under Rule 20 of the CESTAT (Procedure) Rules, 1982 - Tribunal vide order dated 15th April, 2013 allowed the application - Held that - From the perusal of the rules, it can thus be revealed that though Rule 20 permits dismissal of an appeal on account of non-appearance of the appellant, proviso thereto enables the learned Tribunal to restore the appeal on the assessee making out a sufficient cause for his non-appearance when the appeal was dismissed. It can further be seen that apart from that, Rule 41 enables the Tribunal to make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. It can thus clearly be seen that under Rule 41, the learned Tribunal has ample powers which can be used to prevent the abuse of its process or to secure the ends of justice. Under Rule 41 the CESTAT has wide powers to prevent abuse of its process and to secure the ends of justice. As such, though the application was filed under Rule 20, it will have to be held that jurisdiction exercised by the learned Tribunal was under Rule 41 of the said Rules - in the absence of any provision in the Act or Rules specifically prohibiting restoration of appeal dismissed on the ground of non-deposit of penalty, the learned Tribunal has a power and jurisdiction to recall its order, if ends of justice require such course of action - Decided against Revenue.

Summary

Issues:
1. Jurisdiction of the Tribunal to restore an appeal dismissed for non-payment of directed amount.
2. Interpretation of Rules 20 and 41 of the CESTAT (Procedure) Rules, 1982.
3. Applicability of judicial precedents in similar cases.
4. Determining the correct rule under which the Tribunal exercised jurisdiction.
5. Wide powers of the Tribunal under Rule 41 to prevent abuse of process and secure justice.

Issue 1: Jurisdiction of the Tribunal to restore an appeal dismissed for non-payment of directed amount:
The appeal filed by the Revenue challenged the judgment of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), which allowed the respondent's application for restoration of appeal dismissed due to non-compliance with a deposit order. The Assistant Solicitor General argued that the Tribunal lacked jurisdiction to restore an appeal dismissed for non-payment. However, the respondent's counsel contended that the Tribunal had ample powers under Rule 41 to restore such appeals.

Issue 2: Interpretation of Rules 20 and 41 of the CESTAT (Procedure) Rules, 1982:
The Court examined Rules 20 and 41, noting that while Rule 20 allows for dismissal of appeals for non-appearance, the proviso enables restoration upon showing sufficient cause. Rule 41 grants the Tribunal broad powers to prevent abuse of process and ensure justice. Citing the Apex Court's judgment in J.K. Synthetics Ltd., it was emphasized that Rule 41 empowers the Tribunal to set aside orders for sufficient cause.

Issue 3: Applicability of judicial precedents in similar cases:
The respondent relied on judgments from the Gujarat High Court and the Supreme Court to support the Tribunal's jurisdiction to restore appeals dismissed for non-payment. These cases highlighted the importance of securing justice and preventing abuse of process, aligning with the principles upheld in the present matter.

Issue 4: Determining the correct rule under which the Tribunal exercised jurisdiction:
Although the restoration application referenced Rule 20, the Court held that the Tribunal's jurisdiction was rightly exercised under Rule 41. This decision was supported by the Supreme Court's stance on the Tribunal's wide powers under Rule 41 to safeguard justice and prevent misuse of process.

Issue 5: Wide powers of the Tribunal under Rule 41 to prevent abuse of process and secure justice:
The Court reiterated the Tribunal's authority under Rule 41 to issue necessary orders to prevent abuse of process and ensure justice. By referencing judicial precedents and legal principles, the Court affirmed the Tribunal's discretion to recall orders in the interest of justice, even if the initial application cited a different rule.

In conclusion, the Court dismissed the appeal, affirming the Tribunal's jurisdiction under Rule 41 to restore appeals dismissed for non-payment, emphasizing the importance of securing justice and preventing misuse of process.