2014 (11) TMI 301 - HC - Customs

Restoration of appeal - Ex parte order passed - Non appearance of assessee before Tribunal - Held that - No notice of listing of appeal on 5.2.2014 was served upon the assessee and it was under these circumstances that the counsel or representative of the appellant could not appear on the due date. No material has been referred to by the learned counsel for respondent No.1 to establish that notice of date of hearing fixed for 5.2.2014 was ever served upon the appellant. In fact, the Tribunal itself has observed that the notice sent for 5.2.2014 was returned unserved. In such circumstances, it could not be held that the appellant had intentionally avoided to receive the notice. Moreover, unless a litigant is gross negligent in pursuing the litigation, the litigant should not be made to suffer for any bonafide error - Appeal restored before tribunal.

Summary

Issues:
- Appeal for restoration of appeal rejection
- Contrary order to court directions
- Levying penalty without duty evasion
- Applicability of penalty and fine
- Violation of natural justice in the order

Analysis:

Issue 1: Appeal for restoration of appeal rejection
The appellant filed an appeal under Section 130 of the Customs Act against the order of the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal dismissed the appeal ex parte due to the non-appearance of the appellant's counsel. The appellant filed an application for restoration of the appeal, which was also dismissed by the Tribunal. The High Court considered the explanation provided by the appellant's counsel regarding the non-appearance, noting that no notice of the hearing date was served upon the appellant. The Court set aside the orders of the Tribunal and remanded the matter for fresh consideration, emphasizing the importance of affording an opportunity of hearing to the concerned parties.

Issue 2: Contrary order to court directions
The Tribunal had initially set aside the penalty imposed on the appellant, but this decision was challenged by the revenue before the High Court. The High Court, in its order dated 21.3.2013, set aside the Tribunal's decision and remanded the matter back to the Tribunal for fresh consideration. The appellant then submitted written submissions before the Tribunal, but due to administrative reasons, the matter was not heard on the scheduled date. Subsequently, the Tribunal dismissed the appeal ex parte. The High Court found that the appellant had not intentionally avoided receiving the notice for the hearing and, therefore, set aside the Tribunal's orders, emphasizing the need for a fair opportunity of hearing in the interest of justice.

Issue 3: Levying penalty without duty evasion
The case involved the import of hydrogenated vegetable oil from Sri Lanka, where certain batches did not conform to the prescribed standard. The appellant took steps to re-export the non-conforming goods and deposited the penalty imposed by the authorities. The Tribunal initially set aside the penalty, but subsequent administrative issues led to the dismissal of the appeal ex parte. The High Court, considering the circumstances and the principles of natural justice, remanded the matter back to the Tribunal for fresh consideration, ensuring a fair hearing for both parties.

Issue 4: Applicability of penalty and fine
The imposition of a penalty of Rs. 18.10 lakhs on the appellant was a subject of contention in the case. The Tribunal's decision to dismiss the appeal without a proper hearing raised questions regarding the fairness of the proceedings. The High Court, after examining the explanations provided and the lack of intentional avoidance by the appellant, set aside the Tribunal's orders and directed a fresh consideration of the matter, emphasizing the importance of upholding principles of natural justice and providing a fair opportunity for all parties to present their case.

Issue 5: Violation of natural justice in the order
The appellant raised concerns about the violation of natural justice in the proceedings before the Tribunal, particularly regarding the non-receipt of the notice for the hearing date. The High Court acknowledged the appellant's explanation and found that the absence of intentional avoidance justified setting aside the Tribunal's orders. By remanding the matter for fresh consideration, the Court ensured that the parties would have a fair opportunity to present their arguments and address the issues raised in the case.