2018 (9) TMI 88 - HC - Central Excise

Revival of appeal - By the impugned order CESTAT refused to revive an appeal - irregular availment of MODVAT Credit. Held that - The right of appeal sought to be exercised by the petitioner, is a statutory right. Such right flows out of a statute. It is available to any litigant governed by the appeal provisions in respect thereof. The petitioner herein, as a litigant, has the statutory right of appeal. Such right of appeal was sought to be put under suspended animation by the CoD mechanism. The CoD mechanism, then governing the field, postulates, that the right to appeal would revive upon CoD granting the clearance in respect thereof. CoD mechanism was put in place by various decisions of the Hon ble Supreme Court in respect of an authority within the meaning of Article 12 of the Constitution of India. The appellant, before CESTAT, the petitioner herein, was granted leave to apply for restoration upon obtaining CoD clearance. Since the CoD mechanism was done away with, CESTAT ought to have taken such fact into consideration when the petitioner approached it. The impugned order does not look into the problem in such aspect. It proceeds to find that, the appellant continues to suffer from the lack of grant of clearance by COD. The right to prefer the appeal revive been done away, CESTAT ought to consider and decide such appeal on merits. Petition allowed.

Summary

Issues:
Challenge to CESTAT decision based on CoD clearance requirement and subsequent CoD system abolition.

Analysis:
The petitioner contested the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) for rejecting their appeal due to lack of Committee on Disputes (CoD) clearance, following the CoD system's abolition by the Supreme Court. The petitioner argued that the CoD clearance was unnecessary for their second appeal, as they had obtained clearance for the first appeal. They cited precedents like Steel Authority of India Ltd. and General Manager, Telecom District to support their claim. The respondents opposed, stating that the CESTAT's decision was not flawed and allowing appeals without CoD clearance could lead to excessive litigation.

Another aspect of the case involved an Insolvency and Bankruptcy Code proceeding against the petitioner, which concluded with a resolution plan coming into effect. This development lifted the moratorium under Section 14 of the Insolvency and Bankruptcy Code, allowing the petitioner to proceed with their legal matter.

The High Court recognized the petitioner's statutory right to appeal, previously subject to CoD clearance under the abolished system. Referring to the Electronics Corporation of India Ltd. case, the Court emphasized that post-CoD abolition, appeals by authorities under Article 12 of the Constitution no longer required CoD permission. The Court criticized CESTAT for not considering this change and upheld the petitioner's right to have their appeal heard on its merits. Citing relevant case laws, the Court set aside the impugned order and directed CESTAT to consider and decide the petitioner's appeal against the original order in accordance with the law.

In conclusion, the High Court ruled in favor of the petitioner, highlighting the importance of recognizing statutory appeal rights and the impact of CoD system abolition on such rights. The judgment provided clarity on the necessity of CoD clearance post-abolition and emphasized the need for appellate authorities to consider appeals on their merits without outdated procedural hindrances.