2005 (5) TMI 72 - HC - Central Excise

Summary

Issues:
Challenge to order passed by Customs, Excise and Service Tax Appellate Tribunal, Restoration application before CESTAT, Rejection of restoration application by CESTAT, Interpretation of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, Compliance with principles of natural justice, Mistake apparent from the record, Legal position on procedural law.

Analysis:

1. Challenge to CESTAT Order:
The petitioner, a partnership firm, challenged the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) through a petition under Article 226 of the Constitution of India. The order required the petitioner to discharge a duty demand, which was initially allowed in appeal by the Commissioner (Appeals) but later challenged by the Central Excise Department before CESTAT.

2. Restoration Application:
Upon receiving a notice to discharge the liability, the petitioner moved an application seeking restoration of the appeal. This application was based on the petitioner's claim of not receiving the notice of hearing issued by CESTAT. The High Court directed CESTAT to decide the restoration application by a specified date after hearing both parties.

3. Rejection of Restoration Application:
CESTAT, in an ex parte order, dismissed the restoration application stating that it was not maintainable as the appeal was filed by the department and allowed in its favor. The petitioner argued that CESTAT erred in rejecting the application and not granting an adjournment as requested.

4. Interpretation of CESTAT Rules:
CESTAT based its decision on Rules 20 and 21 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982. Rule 20 allows dismissal or restoration of an appeal for default, while Rule 21 pertains to ex parte hearings. The petitioner contended that the restoration application should have been considered in light of the directions from the High Court.

5. Compliance with Principles of Natural Justice:
The judgment emphasized the importance of ensuring proper notice and opportunity for hearing in accordance with the principles of natural justice. It highlighted that CESTAT should have awaited verification of notice issuance before proceeding with an ex parte decision.

6. Mistake Apparent from the Record:
The judgment referred to Section 35C(2) of the Central Excise Act, allowing CESTAT to rectify any mistake apparent from the record if brought to its notice. It was argued that the failure to serve proper notice constituted a legal infirmity in the ex parte decision.

7. Legal Position on Procedural Law:
Lastly, the judgment reiterated that procedural laws should serve the cause of justice and not defeat the rights of parties involved. It quoted a legal precedent to emphasize the importance of interpreting procedural laws in a manner that upholds justice.

In conclusion, the High Court quashed the impugned order of CESTAT and directed a fresh hearing on the restoration application, emphasizing the need for compliance with procedural rules and principles of natural justice.