2019 (2) TMI 1241 - HC - Central Excise

Restoration of appeal - appeal was dismissed for noncompliance of pre-deposit order under Section 35F of the Central Excise Act, 1944 and Section 86 of the Finance Act - Held that - The substantial questions of law raised in this appeal has been considered by the Hon'ble Division Bench of this Court in the case of Classic Builders (Madras) Pvt. Ltd. Vs. CESTAT, Chennai 2016 (4) TMI 687 - MADRAS HIGH COURT and the substantial questions of law were answered in favour of the assessee - it was held in the case that Even if no pre-deposit is made, the appeal may not be heard, but the dismissal of the appeal for non-compliance of pre-deposit does not permit the appellate authority to refuse to restore the appeal upon compliance being shown. This appeal is allowed and the order passed by the Tribunal is set aside and the appeal is restored to the file of the Tribunal and to be heard and decided on merits.

Summary

Issues involved:
Appeal challenging dismissal for non-compliance with pre-deposit order under Section 35F of the Central Excise Act, 1944 and Section 86 of the Finance Act; Jurisdiction of the Tribunal to recall its order for restoration of an appeal; Discrimination in treatment of similar cases for restoration of appeal.

Analysis:

1. Issue 1 - Dismissal for non-compliance with pre-deposit order:
The appellant filed an appeal challenging a service tax demand. The Tribunal directed a pre-deposit, which the appellant failed to comply with, resulting in dismissal of the appeal. The appellant sought restoration, but the Tribunal dismissed the application citing functus officio. The appellant contended that the Tribunal has the power to recall its order for the ends of justice. The High Court referred to previous judgments emphasizing that the Tribunal can recall its order if the Act or Rules do not prohibit restoration, and the ends of justice require it. The Court highlighted that the dismissal for non-compliance does not extinguish the right to appeal, and the Tribunal has wide powers under Rule 41 to secure justice.

2. Issue 2 - Jurisdiction of the Tribunal for restoration:
The appellant argued that the Tribunal has the authority to restore the appeal once the procedural requirement of pre-deposit is fulfilled. Citing various precedents, the Court reiterated that the Tribunal cannot refuse to hear an appeal if the pre-deposit condition is met. The Court emphasized that the right to appeal is statutory, and procedural lapses should not extinguish this right. The Tribunal's power to prevent abuse of process and ensure justice under Rule 41 was underscored, supporting the restoration of the appeal in this case.

3. Issue 3 - Discrimination in treatment for restoration:
The appellant raised concern over discriminatory treatment by the Tribunal in restoring similar cases while denying restoration in this instance. The Court, following established legal principles, held that the Tribunal cannot deprive a party of its substantive right to appeal merely due to procedural violations. By complying with the pre-deposit order, albeit belatedly, the appellant demonstrated adherence to the Tribunal's directive, warranting restoration of the appeal.

In conclusion, the High Court allowed the appeal, setting aside the Tribunal's order and restoring the appeal for further consideration on merits. The Court's decision aligned with previous rulings emphasizing the Tribunal's authority to recall orders for the ends of justice and ensuring the right to appeal is not unjustly curtailed due to procedural lapses.