2014 (2) TMI 771 - HC - Central Excise

Maintainability of appeal - Non appearance of parties - Notice not served - Notice returned as not known - Tribunal dismissed appeal assuming that they are not interested in pursuing this appeal - Held that - notice which was remitted to the assessee was returned undelivered with remarks of postal authority as Not Known . From this, the Tribunal inferred that the appellant has changed its address without an intimation to the Tribunal and consequently the appellant appeared to be not interested in pursuing the appeal. As a matter of fact, the order of the Tribunal, as was urged before the Court, was served on the same address. The provisions of Section 37C(1) of the Act were clearly not followed - there was no valid service upon the appellant - Since, on the admitted facts as they stand, it is clear that there was no valid service on the assessee, it is not necessary for the Court to relegate the assessee to the remedy provided under the Central Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of service of order upon the appellant under Section 37C of the Central Excise Act, 1944.
2. Failure of the Tribunal to consider and decide the appeal of the appellants on merits under Section 35B.
3. Excessive, arbitrary, and unreasonable demand of penalty.

Analysis:

Issue 1: Validity of service of order upon the appellant under Section 37C of the Central Excise Act, 1944:
The Tribunal dismissed the appeal for non-prosecution as the appellant failed to appear despite the notice for hearing being sent in time. The Tribunal inferred that the appellant changed its address without informing, indicating lack of interest in pursuing the appeal. However, the order of the Tribunal was served at the same address. The provisions of Section 37C(1) of the Act regarding service were not followed. The Court found merit in the argument that there was no valid service on the appellant. Therefore, the Court answered the first question in favor of the assessee, highlighting the lack of valid service as a crucial issue.

Issue 2: Failure of the Tribunal to consider and decide the appeal of the appellants on merits under Section 35B:
Since the Court found that there was no valid service on the assessee, it was not necessary to address questions B and C raised by the appellant regarding the failure of the Tribunal to consider the appeal on merits and the excessive penalty demand. The Court's decision on the first issue rendered further discussion on the merits of the appeal unnecessary, thereby disposing of the appeal based on the lack of valid service.

Conclusion:
The judgment focused on the failure to validly serve the order on the appellant as required by Section 37C of the Act. This failure led to the dismissal of the appeal by the Tribunal. The Court's decision in favor of the assessee on this crucial issue rendered the other issues raised moot. The appellant was directed to appear before the Tribunal with a certified copy of the Court's order for further proceedings.