VIRAL LAMINATES PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) In these petitions, which are filed under Art. 226 of the Constitution, the common question that falls for consideration of the Court is whether Rule 20 of Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1962 ("the Rules" for short) insofar as it enables the Appellate Tribunal to dismiss an appeal for default of appearance, is ultra vires the provisions of Sec. 35C(1) of the Central Excises and Salt Act, 1944 ("the Excises Act" for short) and Sec. 129B(1) of the Customs Act, 1962 ("the Customs Act" for short). Under the circumstances, all these petitions are disposed of by this common judgment.

(2.) In order to understand the controversy between the parties, we propose to refer to the facts of Special Civil Application No. 9434 of 1997, as facts of other petitions are almost same. Petitioner No. 1 is a Private Limited Company and inter alia engaged in the business of manufacture of paper-based decorative laminated sheets. Petitioner No. 2 is a director and shareholder of petitioner No. 1 Company. The Commissioner of Central Excise, Ahmedabad, i.e., respondent No. 3 by an order in original dated February 2, 1987 confirmed certain duty liability and imposed penalty. The petitioners, therefore, filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi ("CEGAT" for short) with an application praying to stay the order passed by respondent No. 3. The CEGAT by an interim order stayed the order passed by respondent No. 3 on certain terms and conditions. The hearing of the appeal was fixed before CEGAT on July 26, 1996. The appellants had forwarded written submissions to be considered while hearing the appeal on merits. It is the case of the petitioners that written submissions so forwarded by the petitioners were not put in the concerned file by the registry of the Tribunal. When the appeal was called out for final hearing on July 26, 1996, the petitioners were not present. The CEGAT, therefore, dismissed the appeal for default of appearance of the petitioners. The petitioners thereafter filed an application for restoration of appeal. In support of the averments made in the restoration application, the petitioners had submitted written arguments, but the restoration application was dismissed by CEGAT vide order dated January 27, 1997. The order dismissing appeal for default as well as the order passed on restoration application are collectively produced by the petitioners at Annexure-A to the petition. It is an admitted position that in other petitions also appeals filed by the respective petitioners before the CEGAT were dismissed for default and restoration applications have been dismissed. Therefore, we do not think it necessary to state facts of those petitions in detail.

(3.) The petitioners have mentioned in the petition that Rule 20 of the Rules, which enables the Appellate Tribunal to dismiss the appeal for default of appearance, is unconstitutional and ultra vires the provisions of Sec. 35C(1) of the Excises Act, as well as Sec. 129B(1) of the Customs Act, inasmuch as the Appellate Tribunal is required to dispose of the appeal on merits and has no power to dismiss the appeal for default. It is claimed in the petitions that the provisions contained in Sec. 35C(1) of the Excises Act, as well as Sec. 129B(1) of the Customs Act, to the effect that "the Appellate Tribunal may pass such orders thereon" means that the Appellate Tribunal must pass the order on merits of the appeal as well as on the issue in controversy and, therefore, that part of Rule 20 which enables the Appellate Tribunal to dismiss the appeal for default of appearance of the party, is ultra vires those provisions. It is asserted in the petitions that the part of Rule 20 which enables the Appellate Tribunal to dismiss an appeal for default of appearance is also inconsistent with other provisions of the Excises Act as well as Customs Act under which right to apply for making reference to the High Court as well as power of the High Court to direct the Tribunal to state a case and refer a question of law for determination by the High Court, are affected. What is highlighted in the petitions is that the part of Rule 20 which enables the Appellate Tribunal to dismiss an appeal for default of appearance is not only unreasonable, but also contrary to law pronounced by the Supreme Court in the case of Commissioner of Income-Tax, Madras v. S. Chenniappa Mudaliar, (1969) 74 ITR 41 : AIR 1969 SC 1068. Under the circumstances, by filing these petitions under Art. 226 of the Constitution, the petitioners have prayed to issue a writ of mandamus or any other appropriate writ, direction or order to strike down Rule 20 of Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982. The petitioners have also prayed to issue a writ of mandamus or any other appropriate writ or order directing CEGAT to make a rule providing that appeal shall be decided on merits even if appellant does not remain present on the date on which appeal is fixed for hearing before CEGAT. The petitioners have further prayed to issue a writ, order or direction permanently prohibiting the CEGAT from dismissing any appeal for non-appearance of the appellant. The respective petitioners have also prayed to quash and set aside the orders passed by CEGAT dismissing their appeals for default as well as orders rejecting applications for restoration of appeals on file.