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TMI Blog1999 (8) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... e, only 4 lathe machines, one shipper machine, one drilling machine, gas cutter and one grinding machine were found in the factory premises. No stock of the washers/tikkies was also found there. There was also no related machinery for running the power presses, which are required for the manufacture of washers/tikkies. The appellant was issued show cause notice for having contravened the provisions of Rules 9, 52A, 53, 57A, 57G, 173B, 173G, 174 read with Rule 226 of Central Excise Rules 1944 and illegally claimed inadmissible Modvat credit to the tune of Rs. 17,19,400/- was proposed to be recovered under Sections 11A, 11AA of the Central Excise Act read with Rule 57-I. 3. On receipt of the show cause notice, the appellant submitted reply denying the contents of the notice. Thereafter, the additional Commissioner preventive afforded personal hearing to the appellant and vide order dated 26-11-1997 directed the appellant to pay Rs. 17,19,400/- under Section 11A of the Central Excise Act read with Rule 57-I and also imposed penalty of the same amount under Section 11AC of the said Act, with a further direction to pay interest on delayed payment of duty under Rule 11AB. 4. Feeling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fulfilment of those conditions that right becomes vested and exercisable to the appellant. In this context reference may be made to Vijay Prakash, D. Mehta v. Collector of Customs - 1989 (39) E.L.T. 178 (S.C.) where it has been so observed by the Apex Court. These observations of the Apex Court had been also reiterated in Network Ltd. v. CCE - 1997 (91) E.L.T. 303 by the Delhi High Court. 10. No doubt Section 35 of the Central Excise Act gives statutory right to a person aggrieved by any decision or order, passed under this Act by a Central Excise Officer lower in rank than the Commissioner of Central Excise, to file an appeal against that order to the Commissioner (Appeals) within specified time. But this right is not an absolute and unconditional. It has been circumscribed by the provisions of Section 35F of the Act wherein the conditions for exercising the right, had been laid down. The said Section enacts as under :- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -compliance with the provisions of Section 129 of the Customs Act." 14. There is no provision in the Act under which the order passed by the lower appellate authority (Commissioner Appeals) under Section 35F of the Act rejecting the appeal on failure of the appellant to comply with the provisions of that section or with the conditions imposed by him under the proviso appended to it, has been made appealable to the Tribunal. It is legally, in my view, not possible or permissible to accept the contention of the counsel of the appellant that such an order will fall under the provision Section 35A of the Act and is appealable under Section 35B of the Act. The order of the Commissioner (Appeals) would fall under Section 35A only when it has been passed by him after following the procedure laid down therein and not otherwise, Section 35B of the Act makes only those orders of the Commissioner (Appeals) appealable to the Tribunal which had been passed by him under Section 35A. This Section is absolutely silent about any appeal before the Tribunal, against the Order of the Commissioner (Appeals) which had been passed by him under Section 35F, for failure of the part of the appellant to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth these cases are of no help to the appellant in the instant case. 17. For having not provided any remedy under the Act by way of appeal, to the party aggrieved by the order of the Commissioner (Appeals) rejecting his appeal by exercising power under Section 35F of the Act on account of non-deposit of the duty demanded or the penalty levied or non-fulfilment of the condition imposed, under the proviso to this Section, is no ground to presume or assume that the Tribunal has power and jurisdiction to entertain the appeal against that order. Even the judicial precedent s cannot confer jurisdiction on the Tribunal to entertain an appeal against the order passed by the Commissioner (Appeals) under Section 35F, when the statute does not so provide. In the Act, as observed above, an appeal against the order of Commissioner (Appeals) rendered under Section 35A and not under Section 35F, by aggrieved party has been only provided under Section 35B of the Act. In such a situation, the aggrieved party may invoke the writ jurisdiction of the High Court or of the Apex Court, for the redress. 18. In the light of the discussion, in my view, the instant appeal of the appellant against the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In particular he draws attention to sub-section (4) and sub-section (5) of Section 35A which are in the following terms:- Sub-Section (4) - The order of the Commissioner (A) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. Sub-Section (5) - On the disposal of the appeal, the Commissioner (A) shall communicate order passed by him to the appellant, the adjudicating authority and the Commissioner of Central Excise. 24. Ld. Advocate submits that on disposal of the appeal, the impugned order alone has been communicated by the Commissioner (A) to the appellant and the reason given for disposal of the appeal is that the appellant has not complied with the direction for pre-deposit, ld. Advocate, therefore, submits that the impugned order satisfies the provisions of sub-Section (4) and sub-section (5) of Section 35A of the Central Excise Act. Consequently, he submits, the impugned order being an order passed under Section 35A by the Commissioner (A), the appeal there against would squarely lie to the Tribunal in terms of the provisions of Section 35B(1)(b). He, therefore, submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the Commissioner (Appeals) in terms of Section 35F. Since the direction was not complied with the Commissioner (A) had no option but to dismiss the appeal before him for non-compliance with the said direction. Dismissal of the appeal for non-compliance with the said direction is permissible not under the provisions of Section 35F but by the rulings of the Apex Court as in the case of Vijay Prakash D. Mehta (supra) . This is merely a reason for dismissal of the appeal. It is the appeal before the Commissioner (Appeals) which gets disposed of by the impugned order. 28. It is also a settled position that no appeal lies to the Tribunal against a stay order or a direction for pre-deposit made by a Commissioner (Appeals) on a stay application in an appeal filed before him because that direction is of the interim nature. Interim direction gets merged in the impugned order and merely becomes a reason for disposal of the appeal. That direction by itself, is no longer subsisting independently after issuance of the impugned order in the present case. It will not therefore, be correct to say that the appeal is against the direction directing the appellant to make a pre-deposit. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 35A of the Act and not an order under Section 35F. The question whether the appeal was maintainable before the Tribunal in the facts and circumstances of the case has been referred to me as a Third Member. 34. The matter was heard on 21-12-1999 when Shri K.K. Anand, Advocate appeared for the assessee and Shri Sanjeev Srivastava, JDR appeared for the Department. 35. The impugned order of the Commissioner (Appeals) reads as under :- The appellant was required to make a pre-deposit of Rs. 17,19,400/- vide my Stay Order No. 4/Stay/99 issued under C.No. 218/CE/APPL/CHD/98, dated 15-3-1999 in connection with their appeal and application for waiver of pre-deposit as under Section 35 F. Since the appellants have failed to make the pre-deposit of the said amount, the appeal filed by them is not maintainable for non-compliance of the provisions of Section 35F. I, therefore, dismiss the appeal for default as under Section 35F. 36. Ld. Member (Judicial) has observed in para 14 of his order that there is no provision in the Central Excise Act under which an order passed by the lower appellate authority under Section 35F rejecting the appeal on failure of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition that no appeal lies to the Tribunal against a stay or a direction for pre-deposit made by a Commissioner (Appeals) on a stay application in an appeal filed before him because such a direction was of interim nature. However, the interim direction gets merged in the impugned order and merely becomes a reason for disposal of the appeal. A direction given under Section 35F by itself does not subsist independently after the passing of the Final Order. Since the instant appeal was against an order disposing of an appeal by the Commissioner (Appeals) for all intents and purposes the impugned order was to be treated as an order passed under Section 35A and not under Section 35F. The Vice President further observed that if the contentions urged on behalf of the Revenue was accepted, the Commissioner (Appeals) can easily circumvent the procedures of filing of appeal by a Central Excise, assessee before the appellate Tribunal. To that extent the powers of Tribunal would be rendered nugatory, as urged by the ld. Advocate for the appellants. The Vice President therefore took the view that this will not be an appropriate interpretation of the relevant provisions of the Act. 38. Ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een dismissed by the Commissioner (Appeals) for non-compliance of the provisions of Section 35F. Such an order will not come within the scope of appealable orders under Section 35A. 41. I have considered the submissions of both the sides and have perused the record. Though issue raised falls within a narrow compass, it involves examination of a legal point. Under the Central Excise Act, procedure for filing Appeals has been provided in Chapter VI A (Section 35 and other lettered sections of Section 35). Section 35B is the relevant section relating to filing of appeals before the appellate Tribunal. Relevant part of Section 35B(1) provides as under : Section 35B. Appeals to the Appellate Tribunal - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order :- (a) a decision or order passed by the Commissioner of Central Excise as an adjudication authority. (b) an order passed by the Commissioner (Appeals) under Section 35A; (c) .......................... 42. Section 35A lays down the procedure to be followed by the Commissioner (Appeals) while hearing an appeal passed by an officer of the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right of appeal to the Commissioner (Appeals) and the Appellate Tribunal has been made subject to the condition of pre-deposit of the duty confirmed or penalty imposed against the assessee. The proviso gives a discretionary power to the Commissioner (Appeals)/Appellate Tribunal to dispense with the said pre-condition of the deposit of the amount if he/it is satisfied that such pre-deposit would cause undue hardship to the assessee. Further, a discretion is also given to the appellate authorities to impose conditions while granting waiver of pre-deposit. As per the practice followed by the Commissioner (Appeals) and the Appellate Tribunal, assessees are allowed to pray for such waiver of pre-deposit along with their appeals. This is normally referred to as a stay petition wherein grounds of one type or the other are taken for praying waiver of the pre-deposit. Such stay petitions are taken up first for disposal by the Commissioner (Appeals) or the Appellate Tribunal, as the case may be. Thereafter appropriate order is passed after providing an opportunity to the assessee applicant to substantiate his ground relating to the waiver/stay. Orders are passed either rejecting the stay p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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