NON SPEAKING ORDER

[Mr. M. GOVINDARAJAN]

In hearing a case either by the judicial authority or quasi judicial authority the principles of natural justice is to be followed.   According to this principle the parties concerned to the case are to be given opportunity of being heard and put forth their submissions before the authority.   The adjudicating authority is to take care of all the submissions put forth by the parties, documentary evidences and personal hearings of the parties and to arrive at a decision on the case. The order or judgment should contain a detailed discussion about the case, analysis of the case and the findings of the authority.   The reason for such findings is to be recorded in writing in that order.   If there is no reason is recorded then such order would amount to non speaking order.   Such order is liable to be remitted back by the higher appellate authorities.   Remitting back a case will involve further time for ending the case. Therefore the order passed by the authority should be a speaking order.   Non speaking order will be liable to set aside and the case would be remitted back to the lower authorities for reconsideration after following the principles of natural justice.

In ‘Atul Engineering Udyog V. Commissioner of Central Excise, Kanpur’ – 2010 (7) TMI 364 - CESTAT, NEW DELHI, the order of Commissioner (Appeal) was assailed as mechanical concurring with adjudicating authority.   When there is a bias of above nature, the Tribunal directed to dispose the appeal sending the matter back to the appellate authority below to pass a reasoned and speaking order depicting the matter in controversy, submissions of the appellant, evidence recorded, reasons of decisions and decision to show that his order is not only rendered justice but also seemed to have been done.

In ‘WNS Global Services Private Limited V. Commissioner of Service Tax’ – 2010 (8) TMI 486 - BOMBAY HIGH COURT the Tribunal waived the pre deposit of service tax of Rs.17.50 crores under Business Auxiliary Service while holding appellant as prima facie liable under Market Research Agency service and directed to pre deposit Rs.35 lakhs. The pre deposit waiver on the ground was that Business Auxiliary service eligible for exemption under export of services. The appellant contended that principle applicable in Business Auxiliary Services is also applicable to Market Research Agency Service.   The impugned order does not contain any consideration of the said aspect on Market Research Agency service.   The order directing Rs.35 lakhs as pre deposit is set aside by the High Court.   The matter was remanded to the Tribunal for fresh consideration.

In ‘Aspinwall & Co. Limited V. Commissioner of Central Excise, Mangalore’ – 2010 (10) TMI 321 - CESTAT, BANGALORE a common order was passed disposing nine appeals. Among the nine cases the Tribunal found that in the case ‘Hason Haji & Co.,’ the adjudicating authority has ordered for recovery of CENVAT credit which according to him was not eligible to the assessee.   On a careful scrutiny and perusal of the order, the Tribunal found that the adjudicating authority has not given any reasoning for holding this view and the amount of CENVAT credit availed by him needs to be recovered from him.   In the absence of any reasoning and finding, suffice to say that the said order is a non speaking order.   The Tribunal remitted the matter to the adjudicating authority with a direction to consider the assessees’ pleas and pass a reasoned order.   Needless to say that the adjudicating authority will follow the principles of Natural Justice before coming to a conclusion.

In another case ‘Shri Ganesh Shipping Agency’, the Tribunal found that the adjudicating authority in addition to the confirmation of the demand of duty on the appellant under the ‘port service’ has also confirmed the demands under ‘streamer agents service’ and ‘cleaning and forwarding services’.   Here again the Tribunal found that the adjudicating authority has not given any reasoning for coming to such a conclusion that the appellant had not paid the service tax on these services rendered by him.   In the absence of any reasoning or findings, the Tribunal was constrained to remit the matter back to the adjudicating authority, with a direction to follow the principles of Natural Justice before coming to any conclusion as to the differential duty liability.

In ‘Anil Products Limited V. Commissioner of Central Excise, Ahmedabad-II’ – 2010 (2) TMI 662 - GUJARAT HIGH COURT the High Court held that the Tribunal’s order is non speaking order.   Mere reproduction of submission in the order of the body is not enough.   The finding of deciding authority on these submissions is equally necessary.   Mere reliance on an earlier decision, that too, when it was decided ex-parte, is not also sufficient to take any decision one way or the other.   The Tribunal ought to have given its specific findings on various submissions made, judgments relied upon and distinguishing features pointed out by the appellant before the Tribunal.   The High Court ordered to remand the matter back to the Tribunal for afresh decision.

In ‘Hathway Cable Entertainment (P) Limited V. Commissioner of Service Tax – III’ – 2010 (10) TMI 414 - CESTAT, NEW DELHI the Tribunal held that it was surprising to note from the orders of the authority below that they did not examine any of the evidence the appellant produced, when the show cause notice alleged that there was collection of service tax by the appellant, while receiving the consideration for the service provided.   There cannot be levy of penalty automatically without coming to the conclusion that the appellant realized tax and did not deposit the same to the treasury with intent to evade the tax.   Merely disclosing the provision of law, the levy enforced by the authority shall not serve the object of the statute. The Tribunal remanded the matter to the adjudicating authority to examine the issue threadbare with the material facts and evidence on records, as to whether the ingredients of Section 78 exist the imposing penalty.   Granting fair opportunity of hearing to the appellant the authority shall examine the entire allegation in the show cause notice and pass a reasoned and speaking order.

In ‘Commissioner of Customs (Prevention) V. Essar Oil Limited’ – 2010 (4) TMI 728 - GUJARAT HIGH COURT  the High Court held that the High Courts have in an umpteen number of decisions held that the orders passed by the appellate authority should be supported by reasons.   Despite there being a plethora of precedents holding that an appellate authority is required to record facts, contentions as well as reasons for arriving at its conclusions, it is a matter of regret that the Tribunals still continue to ignore the same and pass orders without recording the facts or reasons.

In ‘Tata Engineering & Locomotive Co. Limited V. Collector of Central Excise, Pune’ – 2006 (9) TMI 185 - SUPREME COURT OF INDIA the Supreme Court wad dealing with a case whereby a cryptic and non speaking order, the Tribunal had upheld the order passed by the Commissioner by applying the ratio of the decision of the larger bench in TISCO Limited ‘2000 (4) TMI 55 - CEGAT, COURT NO. II, NEW DELHI without recording any findings of the fact.   The Supreme Court held that it is not sufficient in a judgment to give conclusions alone but it is necessary to give reasons in support of the conclusions arrived at.   The Court set aside the order of the Tribunal as the findings recorded by the Tribunal were cryptic and non speaking and remitted the matter back to the Tribunal for taking a fresh decision by a speaking order in accordance with law after affording due opportunity to both the parties.

In ‘Punjab State C&WC Limited V. Commissioner of Service Tax, Mumbai’ – 2010 (11) TMI 410 - CESTAT, MUMBAI the Tribunal found that the Commissioner has not considered the contentions of the appellant that the show cause notice is barred by limitation.   Hence the matter needs examination at the end of the Commissioner (Appeals) to decide whether the show cause notice is barred by limitation or not.   Hence, after setting aside the impugned order the matter is sent back to the Commissioner (Appeals) first to decide the limitation issue; if the appellant succeeds on limitation issue, he will not deal with merits; if the appellant failed to succeed on limitation, then he will consider the merits of the case.

In ‘Commissioner of Central Excise, Mumbai V. Mahindra & Mahindra Limited’ – 2010 (3) TMI 313 - BOMBAY HIGH COURT the High Court held that the order of the Tribunal is unreasoned order.   Order did not deal with rival contentions of the parties giving reasons.   In this view the impugned order passed by the Tribunal is liable to be quashed and set aside for want of reasons and matter needs to be remanded back to the Tribunal.