BALAR FABRICS PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) WE have heard Mr. Manoj Bhandari learned counsel for the petitioner and Mr. N. M. Lodha, Sr. Central Government Standing Counsel. The petitioner - a private Company has approached to this Court under Articles 226 & 227 of the Constitution of India aggrieved of the order of Central Excise & Gold Control Appellate Tribunal (hereinafter referred to as CEGAT) whereby its appeal has been dismissed for want of prosecution by the impugned order (Annexure-5) dated 5. 2. 2001. The principal contention is that the Tribunal is not empowered to dismiss an appeal for default of appearance but has to decide the same on merit in view of the expression "thereon" used in Section 35-C (1) of the Central Excise & Salt Act, 1944.

(2.) THE necessary facts giving rise to the instant writ petition are that petitioner Company is a manufacturer and processor engaged in manufacture of textile fabrics falling under different headings of the Schedule to the Central Excise Tariff Act, 1985. It clears duty for the goods in accordance with the provisions of the Act and the rules made thereunder. THE petitioner was served with a show cause notice to reverse the deemed MODVAT credit of Rs. 47249/- alleged to have been taken fraudulently by the petitioner in contravention to Rule 57 (A) to Rules 57 (F) read with notification dated 3. 09. 1986 of the Central Excise & Tariff Rules. Petitioner submitted a reply to the show cause notice. THE Additional Commissioner confirmed the demand and also imposed the equal penalty by order dated 17. 02. 1999. THE petitioner preferred an appeal, which was rejected by the order of the Commissioner (Appeals) dated 6. 07. 2000. Aggrieved of the said order, the petitioner further appealed under Section 35- B before the CEGAT. On 5. 02. 2001 the Chartered Accountant appearing for the petitioner did not appear before the CEGAT on account of his illness. An adjournment was sought by sending a telegram. THE learned Technical Member of the CEGAT dismissed the appeal for want of prosecution by the impugned order dated 5. 2. 2001. THE petitioner filed an application for restoration, but the same was also rejected by the order dated 25. 09. 2001.

(3.) CONSIDERING the entire scheme of the relevant provisions and particularly the expression "thereon" appearing in Sec. 33 (4) of the Income Tax Act as well as provisions of Sec. 66 relating to reference to the High Court, the Apex Court held that Tribunal has no power to dismiss an appeal for non-appearance of the appellant and the appeal must be decided on merit. It is, thus, evident that the manner and method in which the appeal filed before the Appellate Tribunal under the provisions of the Income Tax Act, 1922 is required to be disposed of are the same as envisaged under Sec. 35-C (1) of the Excise Act as well as Sec. 129-B (1) of the Customs Act. Therefore, the decision rendered by the Supreme Court in Mudaliar's case applies to the instant controversy with full force. Thus, there is no manner of doubt that the appeal filed before the Tribunal has to be disposed of on merit and cannot be dismissed for want of appearance of the appellant. A Division Bench of the Delhi High Court in Prakash Fabrics vs. Union of India (3) dealing with the identical situation observed: " Where there is no appearance on behalf of the appellant, the Tribunal has to decide the appeal ex parte. The Court further observed that the use of expression "thereon" means that the Tribunal has to pass order on the subject matter of appeal and on the issue of controversy. "