ADOR POLYCONTAINERS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) AFTER careful examination of the records of the case and after hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Moreover, the appellants appear to have a prima facie case. Therefore, we allow the present application unconditionally and proceed to dispose of the appeal itself finally.

(2.) THE jurisdictional Asstt. Commissioner had disallowed the Modvat credit of Basic Excise Duty of Rs. 12,20,921/ - and Special Excise Duty of Rs. 61,046/ - under Rule 57 -I of Central Excise Rules and had also imposed penalty of Rs. 1,00,000/ - on the appellants under Rule 173Q of the Rules. Against this order of the Asstt. Commissioner, the party preferred an appeal to the Commissioner of Central Excise (Appeals). The party also submitted an application for waiver of pre -deposit of the duty and penalty amounts and for stay of recovery thereof, pending the appeal. This application was disposed of by the Commissioner (Appeals) after hearing the party, as per order dated 14 -3 -2000, whereby the appellants were directed to freeze Rs. 6,00,000/ - in their RG 23A part II account with the jurisdictional officer. The said order was received by the appellants on 27 -3 -2000, but they did not comply with the same. Instead, the appellants filed an application dated 1 -8 -2000 for reconsideration of the above stay order on numerous grounds stated therein. In the said application, which was received by the lower Appellate Authority on 7 -8 -2000, the appellants had, inter alia, relied on a catena of decisions of the Tribunal as well as of the Supreme Court and various High Courts, in support of their submission that they had a strong prima facie case warranting complete waiver of pre -deposit. This application for reconsideration of the stay order was not considered on its merits by the ld. Commissioner (Appeals) who informed the party that no review of the stay order was possible since, according to that authority, it had become functus officio with the passing of the stay order. Subsequently, the party submitted another application, dated 26 -8 -2,000 for reconsideration of the Stay order, by citing judicial decisions upholding the power of the Commissioner (Appeals) to so reconsider the stay orders. This request of the party was also ignored by the ld. Commissioner (Appeals). The lower Appellate Authority, thereafter, passed the impugned order rejecting the party's appeal on the sole ground of non -compliance with the direction for freezing of inputs -credit to the extent of Rs. 6 lakhs. The ld. Commissioner (Appeals) passed the said order without looking into the merits of the case, nor affording any opportunity of personal hearing to the appellants. Hence the present appeal before us.

(3.) WE have heard both sides. Ld. Advocate Shri M.H. Patil submits that the entire proceedings of the ld. Commissioner (Appeals) are vitiated by negation of natural justice, and, therefore, the matter requires to be remanded. Ld. SDR Smt. Reena Arya for the Revenue has not contested the fact that the impugned order was passed in violation of principles of natural justice -