Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10265 OF 2014
(Arising out of Special Leave Petition (C) NO. 8738 OF 2014)
Balaji Steel Re-Rolling Mills .... Appellant(s)
Versus
Commissioner of Central Excise
and Customs .... Respondent(s)
J U D G M E N T
R.K. Agrawal, J.
1) Leave granted
2) The sole question of law which arises for consideration in the
present appeal is as to whether the Customs, Excise and Service
Tax Appellate Tribunal (in short ‘the Tribunal’) has the power to
dismiss the appeal for want of prosecution or not.
JUDGMENT
3) The appellant is a partnership firm engaged in the manufacture
and sale of Hot Re-rolled products. The Commissioner of Central
Excise and Customs, Aurangabad, vide order dated 20.07.1999, re-
fixed the annual capacity of production and duty liability of the
appellant. Being aggrieved, the appellant moved the Tribunal.
The Tribunal, vide order dated 18.01.2002, remanded the matter
back to the Commissioner of Central Excise and Customs with a
direction to determine the capacity of production in accordance
with law after hearing the appellant. The Commissioner of Central
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Excise and Customs, Aurangabad, once again affirmed the order
dated 20.07.1999. The appellant filed an appeal before the
Tribunal against the order dated 14.05.2004 passed by the
Commissioner of the Central Excise & Customs, Aurangabad which was
placed for hearing on 22.08.2012. On the very said date, the
appellant as also his counsel were not present. The Tribunal,
therefore, dismissed the appeal for want of prosecution. The
restoration application was also dismissed. The appellant
preferred an appeal before the High Court of Bombay, Bench at
Aurangabad being Central Excise Appeal No. 14 of 2013. The High
Court, by order dated 18.01.2014, dismissed the appeal on the
ground that no substantial question of law arises for
consideration.
4) Against the said order, the appellant has preferred this
appeal by way of special leave.
5) Heard Mr. Shashibhushan P. Adgaonkar, learned counsel for the
appellant and Shri K. Radhakrishnan, learned senior counsel for
JUDGMENT
the respondent.
6) Learned counsel for the appellant submitted that even if the
appellant was not present before the Tribunal when the appeal was
taken up for hearing, it could not have been dismissed for want of
prosecution as Section 35C of the Central Excise Act, 1944 (in
short ‘the Act’) enjoins upon the Tribunal to pass orders thereon
as it thinks fit, that is, confirming, modifying or annulling the
decision or order appealed against or may refer the case back to
the authority which passed such decision or order with such
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directions as it may think fit, for a fresh adjudication or
decision, as the case may be, after taking additional evidence, if
necessary. Thus, there is no power vested in the Tribunal to
dismiss the appeal for want of prosecution even if the appellant
therein has not appeared when the appeal was taken up for hearing.
7) He further submitted that Rule 20 of the Customs, Excise and
Service Tax Appellate Tribunal (Procedure) Rules, 1982 (in short
‘the Rules’) cannot be resorted to as the Section itself does not
give power to the Tribunal to dismiss the appeal for want of
prosecution.
8) Learned senior counsel for the respondent, however, submitted
that under Rule 20 of the Rules, the Tribunal has been given the
power to dismiss the appeal for want of prosecution if the
appellant does not appear, and therefore, the order passed by the
Tribunal as also by the High Court calls for no interference.
9) Section 35C(1) of the Act which deals with the powers of the
Tribunal reads as under:-
JUDGMENT
“35C. Orders of Appellate Tribunal.—(1) The
Appellate Tribunal may, after giving the parties to
the appeal an opportunity of being heard, pass such
orders thereon as it thinks fit, confirming,
modifying or annulling the decision or order
appealed against or may refer the case back to the
authority which passed such decision or order with
such directions as the Appellate Tribunal may think
fit, for a fresh adjudication or decision, as the
case may be, after taking additional evidence, if
necessary.”
10) Rule 20 of the Rules which gives a power to the Tribunal to
dismiss the appeal for default in case the appellant does not
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appear when the appeal is called on for hearing reads as under:-
“RULE 20. Action on appeal for appellant’s
default. — Where on the day fixed for the hearing
of the appeal or on any other day to which such
hearing may be adjourned, the appellant does not
appear when the appeal is called on for hearing,
the Tribunal may, in its discretion, either dismiss
the appeal for default or hear and decide it on
merits:
Provided that where an appeal has been dismissed
for default and the appellant appears afterwards
and satisfies the Tribunal that there was
sufficient cause for his non-appearance when the
appeal was called on for hearing, the Tribunal
shall make an order setting aside the dismissal and
restore the appeal.”
11) From a perusal of the aforesaid provisions, we find that the
Act enjoins upon the Tribunal to pass order on the appeal
confirming, modifying or annulling the decision or order appealed
against or may remand the matter. It does not give any power to
the Tribunal to dismiss the appeal for default or for want of
prosecution in case the appellant is not present when the appeal
is taken up for hearing.
JUDGMENT
12) A similar question came up for consideration before this Court
in The Commissioner of Income-Tax, Madras vs. S. Chenniappa
Mudaliar, Madurai 1969 (1) SCC 591 wherein this Court considered
the provisions of Section 33 of the Income-tax Act, 1922 and Rule
24 of the Appellate Tribunal Rules, 1946 which gave power to the
Tribunal to dismiss the appeal for want of prosecution. For ready
reference, Section 33(4) of the Income Tax Act, 1922 and Rule 24
of the Appellate Tribunal Rules, 1946 are reproduced below:-
Section 33(4) of the Income Tax Act, 1922
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“33(4). The Appellate Tribunal may, after giving
both parties to the appeal an opportunity of being
heard, pass such orders thereon as it thinks fit,
and shall communicate any such orders to the
assessee and to the Commissioner.”
Rule 24 of the Appellate Tribunal Rules, 1946
“24. Where on the day fixed for hearing or any
other day to which the hearing may be adjourned,
the appellant does not appear when the appeal is
called on for hearing, the Tribunal may dismiss the
appeal for default or may hear it ex parte.”
Considering the aforesaid provisions, this Court held as under:-
“7. The scheme of the provisions of the Act
relating to the Appellate Tribunal apparently is
that it has to dispose of an appeal by making such
orders as it thinks fit on the merits. It follows
from the language of Section 33(4) and in
particular the use of the word “thereon” that the
Tribunal has to go into the correctness or
otherwise of the points decided by the departmental
authorities in the light of the submissions made by
the appellant. This can only be done by giving a
decision on the merits on questions of fact and law
and not by merely disposing of the appeal on the
ground that the party concerned has failed to
appear. As observed in Hukumchand Mills Ltd. v.
CIT, the word “thereon” in Section 33(4) restricts
the jurisdiction of the Tribunal to the subject-
matter of the appeal and the words “pass such
orders as the Tribunal thinks fit” include all the
powers (except possibly the power of enhancement)
which are conferred upon the Appellate Assistant
Commissioner by Section 31 of the Act. The
provisions contained in Section 66 about making a
reference on questions of law to the High Court
will be rendered nugatory if any such power is
attributed to the Appellate Tribunal by which it
can dismiss an appeal, which has otherwise been
properly filed, for default without making any
order thereon in accordance with Section 33(4). The
position becomes quite simple when it is remembered
that the assessee or the CIT, if aggrieved by the
orders of the Appellate Tribunal, can have resort
only to the provisions of Section 66. So far as the
questions of fact are concerned the decision of the
Tribunal is final and reference can be sought to
JUDGMENT
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the High Court only on questions of law. The High
Court exercises purely advisory jurisdiction and
has no appellate or revisional powers. The advisory
jurisdiction can be exercised on a proper reference
being made and that cannot be done unless the
Tribunal itself has passed proper order under
Section 33(4). It follows from all this that the
Appellate Tribunal is bound to give a proper
decision on questions of fact as well as law which
can only be done if the appeal is disposed of on
the merits and not dismissed owing to the absence
of the appellant. It was laid down as far back as
the year 1953 by S.R. Das, J. (as he then was) in
CIT, v. Mtt. Ar. S. Ar. Arunachalam Chettiar that
the jurisdiction of the Tribunal and of the High
Court is conditional on there being an order by the
Appellate Tribunal which may be said to be one
under Section 33(4) and a question of law arising
out of such an order. The Special Bench, in the
present case, while examining this aspect quite
appositely referred to the observations of
Venkatarama Aiyar, J. in CIT v. Scindia Steam
Navigation Co. Ltd. indicating the necessity of the
disposal of the appeal on the merits by the
Appellate Tribunal. This is how the learned judge
had put the matter in the form of interrogation:
“How can it be said that the Tribunal should seek
for advice on a question which it was not called
upon to consider and in respect of which it had
no opportunity of deciding whether the decision
of the Court should be sought.”
JUDGMENT
Thus looking at the substantive provisions of the
Act there is no escape from the conclusion that
under Section 33(4) the Appellate Tribunal has to
dispose of the appeal on the merits and cannot
short-circuit the same by dismissing it for default
of appearance.”
13) Applying the principles laid down in the aforesaid case to the
facts of the present case, as the two provisions are similar, we
are of the considered opinion that the Tribunal could not have
dismissed the appeal filed by the appellant for want of
prosecution and it ought to have decided the appeal on merits even
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if the appellant or its counsel was not present when the appeal
was taken up for hearing. The High Court also erred in law in
upholding the order of the Tribunal.
14) We, therefore, set aside the order dated 18.01.2014 passed by
the High Court of Judicature of Bombay, Bench at Aurangabad and
also the order dated 22.08.2012 passed by the Tribunal and direct
the Tribunal to decide the appeal on merits.
15) Accordingly, the appeal is allowed with a cost of Rs. 25,000/-
to be payable by the Respondent.
...…………….………………………J.
(ANIL R. DAVE)
.…....…………………………………J.
(KURIAN JOSEPH)
.…....…………………………………J.
(R.K. AGRAWAL)
JUDGMENT
NEW DELHI;
NOVEMBER 14, 2014.
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ITEM NO.1A COURT NO.14 SECTION III
(For judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 8738/2014
(Arising out of impugned final judgment and order dated 18/01/2014
in CEA No. 14/2013 passed by the High Court of Bombay at
Aurangabad)
BALAJI STEEL RE-ROLLING MILLS Petitioner(s)
VERSUS
C.C.E.& CUSTOMS Respondent(s)
Date : 14/11/2014 This petition was called on for pronouncement
of judgment today.
For Petitioner(s) Mr. Shashibhushan P. Adgaonkar, Adv.
For Respondent(s) Mr. K. Radhakrishnan, Sr. Adv.
Ms. Sunita Rani Singh, Adv.
For Mr. B. Krishna Prasad, AOR
Hon'ble Mr. Justice R.K. Agrawal pronounced the reportable
JUDGMENT
judgment of the Bench comprising Hon'ble Mr. Justice Anil R. Dave,
Hon'ble Mr. Justice Kurian Joseph and His Lordship.
Leave granted.
The appeal is allowed with a cost of Rs. 25,000/- to be
payable by the Respondent in terms of the signed reportable
judgment.
(R.NATARAJAN) (SNEH LATA SHARMA)
Court Master Court Master
(Signed reportable judgment is placed on the file)
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