2018 (10) TMI 212 - HC - Central Excise

Principles of Natural Justice - non-speaking order - Whether in the facts and circumstances of the case and in law, is the order of the Tribunal is in breach of principle of natural justice inasmuch as it does not deal with Appellant s appeal in respect of penalty and yet dismissed it for reason for having confirmed the duty demand and penalty in the case of partnership firm in which the Appellant is a partner? Held that - The impugned order dated 17th April, 2017 to the extent it disposes of the Appellant s appeal, is a non-speaking order. Accordingly, the substantial question of law is answered in the affirmative i.e. in favour of the Appellant and against the Revenue - the impugned order dated 17th April, 2017 is set aside to the extent it relates to Appellant herein. Appeal of the Appellant herein before the Tribunal, is restored to it for fresh disposal, in accordance with law by a speaking order.

Summary

Issues:
Appeal challenging order of Customs, Excise and Service Tax Appellate Tribunal regarding duty demand and penalty imposition on partnership firm and partner - Breach of natural justice - Non-speaking order - Consideration of partner's appeal separately.

Analysis:
The judgment involves an appeal under Section 35G of the Central Excise Act, 1944, challenging a common order dated 17th April, 2017 passed by the Customs, Excise and Service Tax Appellate Tribunal. The substantial question of law admitted for consideration is whether the Tribunal's order breached the principle of natural justice by not addressing the appellant's appeal regarding penalty imposition on the partnership firm. The dispute was resolved within a narrow scope at the request of the parties' counsel.

The appellant, a partner of a partnership firm, M/s. Gurunanak Metal Works, had duty demand confirmed and penalties imposed by the Assistant Commissioner of Central Excise, which was upheld by the Commissioner of Central Excise (Appeals). Both the appellant and the partnership firm filed appeals to the Tribunal. However, the impugned order of the Tribunal only discussed the facts and law related to the partnership firm, failing to mention or consider the appellant's appeal separately. The Tribunal's decision to uphold the penalty on the partnership firm did not automatically justify the penalty on the partners, necessitating a separate consideration of the appellant's appeal.

The High Court found that the impugned order of the Tribunal, to the extent it disposed of the appellant's appeal, was a non-speaking order. Consequently, the substantial question of law was answered in favor of the appellant and against the Revenue. The High Court set aside the impugned order and restored the appellant's appeal before the Tribunal for fresh disposal in accordance with the law by a speaking order. Ultimately, the appeal was disposed of in favor of the appellant, emphasizing the importance of addressing each party's appeal separately to ensure a fair and just outcome.