2019 (2) TMI 942 - HC - Central Excise

Maintainability of appeal - applicability of Section 35-G of the Central Excise Act - imposition of penalty of ₹ 10,000/- - dismissal of appeal on the ground that the amount of penalty involved was less than ₹ 2,00,000/- - Held that - Para (ii) of second proviso to Section 35-B does not apply, which is essentially meant to cover the cases referred in clause (b), clause (c) or clause (d) of subsection (1) of Section 35-B of the Act. Clause (ii) of second proviso to Section 35-B is not applicable in the present case and hence regardless of the fact that the quantum of penalty being subject matter of the appeal before the Tribunal was less than ₹ 2,00,000/-; the Tribunal did not have discretion to refuse to admit the appeal and non-suit the appellant, by holding its appeal as not maintainable. The impugned order dated 31.10.2017 passed by the Tribunal being contrary to the unequivocal statutory provision, deserves to be quashed and set aside - appeal allowed.

Summary

Issues:
Appeal maintainability under Section 35-B of Central Excise Act.

Analysis:
The judgment revolves around the appeal filed under Section 35-G of the Central Excise Act challenging the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissing the appellant's appeal as not maintainable due to the penalty amount being less than ?2,00,000. The appellant, owner of a truck engaged in transporting excisable goods, was penalized ?10,000 by the Commissioner of Central Excise. The main contention was whether the Tribunal was justified in rejecting the appeal based on the second proviso to Section 35-B, as the penalty amount was below the threshold. The Tribunal's decision was deemed erroneous as the appeal fell under clause (a) of sub-section (1) of Section 35-B, not clause (b), (c), or (d). The judges highlighted the definition of "Adjudicating Authority" and clarified that the second proviso was inapplicable in this context.

The judges emphasized that the Tribunal's discretion to refuse an appeal under the second proviso to Section 35-B did not extend to cases under clause (a) of sub-section (1) of Section 35-B. The order of the Tribunal was deemed contrary to statutory provisions and was quashed. The appellant's appeal was allowed, the question of law was answered in the negative, and the Tribunal's order was set aside. The appeal was reinstated for further consideration based on its merits and in compliance with the law. The judgment aimed to rectify the Tribunal's misapplication of the law and ensure the proper adjudication of the appellant's appeal.

This detailed analysis of the judgment highlights the legal intricacies involved in determining the maintainability of the appeal under the Central Excise Act, focusing on the correct interpretation of statutory provisions and the application of relevant legal principles.