2019 (8) TMI 1312 - HC - Central Excise

Principles of Natural Justice - non-speaking order - it is also claimed by the petitioner that the impugned order has given contradictory findings, as on one hand it holds that the petitioner disputes the due liability on merits while on the other it states that the petitioner is not contesting the duty liability - HELD THAT - In case, according to the party / parties the facts are not properly recorded in the impugned order, then challenge to it cannot be before us that the impugned order has incorrectly recorded the petitioner s submissions on facts. The remedy, if any, against the order of the Tribunal would be rectification application. However, in this case, we note that it is not a case of incorrect recording of submissions but recording of contradictory submissions and then dealing with appeal on the basis of only one submission. In fact, the Tribunal records the appellant's submission that the appellant denies its liability to duty on merits and immediately thereafter it records that as the duty has been paid, it does not dispute it - the order itself is unclear as to what exactly is the finding of the Tribunal on this fact. It is only thereafter that the issues can be framed and determined. There are no discussion in the impugned order on merits as to why the development cost incurred by the petitioner has nexus with the final product. In fact, the impugned order seems to proceed on the basis that as the petitioner has paid the duty without any dispute, it follows that duty liability is admitted - it could not have taken a contrary view on a principle without explaining the context which would justify a different view in the present facts. The impugned order dated 16th May, 2017 to the extent it relates to the petitioner is set aside and restored to the Tribunal for fresh disposal in accordance with law - petition allowed.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal (Tribunal) under Article 226 of the Constitution of India based on delay and non-speaking order.

Issue 1: Delay in filing petition
The petition was challenged on the ground of delay due to the significant time gap between the impugned order date and the filing date. However, the petitioner explained the delay by stating that it was actively pursuing the challenge through an appeal under Section 35G of the Act before the Court, which was later withdrawn with liberty to take further legal action. The High Court found the explanation satisfactory and proceeded to consider the petition on its merits.

Issue 2: Non-speaking order and breach of natural justice
The petitioner contended that the impugned order was a non-speaking order, breaching the principles of natural justice. It was argued that the order contained contradictory findings, stating both that the petitioner disputes the duty liability on merits and that the duty liability is not contested. The High Court analyzed the order's content and found that it indeed presented contradictory statements, leading to uncertainty regarding the Tribunal's actual findings on the matter. The Court emphasized the importance of clarity in judicial orders and highlighted the necessity for proper framing of issues before making determinations.

Judgment Analysis:
The High Court set aside the impugned order dated 16th May, 2017, due to the lack of clarity and contradictory nature of the findings. It was observed that the Tribunal's decision did not provide a reasoned analysis on the merits of the case regarding the nexus between the development cost and the final product. The Court referred to a previous order by the same bench, emphasizing that the mere payment of duty does not imply admission of liability, which contradicted the approach taken in the impugned order. Consequently, the High Court directed the restoration of the matter to the Tribunal for fresh disposal in accordance with the law, allowing the petition in the aforementioned terms.

This detailed analysis of the judgment showcases the High Court's thorough examination of the issues raised, including the delay in filing the petition and the concerns regarding the non-speaking nature of the impugned order. The Court's decision to set aside the order and remand the case for fresh consideration underscores the significance of clarity and consistency in judicial proceedings to uphold principles of natural justice and ensure fair adjudication.