2014 (10) TMI 199 - HC - Service Tax

Maintainability of appeal - Held that - Commissioner (Appeals) should not have expressed an opinion different from the order of the High Court In spite of the directions of the High Court, the Commissioner (Appeals) refused to decide the appeal. The Commissioner should not have expressed the opinion differently to that of the opinion given by this Court. When the High Court has in clear terms ruled that appeal lies, the Commissioner under Article 227 of the Constitution of India, had no option, but to proceed with the hearing of the appeal on merit. Perhaps, this aspect escaped the notice of Commissioner - matter restored before commissioner - Decided in favour of petitioner.

Summary

Issues:
Challenge to order of Commissioner of Customs, Central Excise & Service Tax (Appeals-II) | Jurisdiction of High Court under Article 226 of the Constitution of India | Appeal under Section 35 of the Central Excise Act, 1944 | Quashing of Notices under Central Excise Act | Authority of Commissioner to dismiss appeal | Breach of quasi-judicial discipline | Statutory provision for appeal against notices | Commissioner's opinion vs. High Court ruling | Restoration of appeal for hearing on merit

The High Court of Andhra Pradesh heard a Writ Petition challenging the order of the Commissioner of Customs, Central Excise & Service Tax (Appeals-II), Hyderabad. The petitioner had previously filed a similar Writ Petition in 2013, which was disposed of by a Division Bench of the Court stating that the petitioner must exhaust the alternative remedy of appeal under Section 35 of the Central Excise Act before approaching the High Court under Article 226 of the Constitution of India. The petitioner then filed an appeal before the Commissioner, which was not accepted initially, leading to the filing of another Writ Petition for consideration. The Commissioner, without deciding the application on merit, dismissed the appeal stating that no appeal lies against notices issued under Section 11 of the Central Excise Act. The petitioner contended that this decision was contrary to the High Court's opinion and breached quasi-judicial discipline. The Court noted that the Commissioner should have proceeded with the appeal on merit as per the High Court's ruling, and set aside the judgment, restoring the appeal for hearing on merit within two months, with compliance report to be submitted thereafter.

The key issue in this case revolved around the authority of the Commissioner to dismiss the appeal based on the opinion that no appeal lies against notices issued under the Central Excise Act. The Court emphasized that the Commissioner, being subordinate to the High Court under Article 227 of the Constitution of India, should have independently decided the appeal on merit, especially after the High Court had ruled that an appeal lies under Section 35 of the Act. The Court found that the Commissioner's decision was based on a misplaced opinion of the Department's Representative, and directed the appeal to be restored for hearing on merit, provided there was no pre-deposit element involved, to be disposed of within two months.

Another significant issue addressed was the breach of quasi-judicial discipline by the Commissioner in not following the High Court's ruling and accepting the Department's opinion to dismiss the appeal. The Court highlighted that the Commissioner should have adhered to the High Court's decision that an appeal lies under the Central Excise Act and proceeded with the hearing accordingly. By setting aside the judgment and restoring the appeal for hearing, the Court aimed to rectify this breach and ensure the appeal is decided on merit as per the legal provisions.

The judgment also delved into the statutory provision for appeal against notices issued under the Central Excise Act and the Commissioner's interpretation of the same. The Court clarified that the Commissioner's view that no appeal lies against such notices was not in line with the legal framework, especially after the High Court had explicitly stated that an appeal is a valid remedy under Section 35 of the Act. By overturning the Commissioner's decision and restoring the appeal for hearing on merit, the Court reinforced the statutory provision for appeal and the importance of following legal procedures in such matters.

In conclusion, the High Court's judgment in this case focused on upholding the legal remedy of appeal under the Central Excise Act, rectifying the breach of quasi-judicial discipline by the Commissioner, and ensuring that the appeal is decided on merit as per the High Court's ruling. By setting aside the Commissioner's decision and restoring the appeal for hearing within a specified timeframe, the Court aimed to uphold the principles of justice and legal procedure in addressing the issues raised by the petitioner.