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FAIRDEAL SUPPLIES LTD. V/S COMMISSIONER OF CUSTOMS, decided on Friday, May 5, 2017.
[ In the High Court of Gujarat at Ahmedabad, Special Civil Application No. 6576 of 2017. ] 05/05/2017
Judge(s) : HARSHA DEVANI & A.S. SUPEHIA
Advocate(s) : Mihir Joshi, Sr. with Anuj K. Trivedi. Chintan H. Dave.
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  "2017 (351) ELT 220"  ==   ""  







    Harsha Devani J.Oral:1. Rule. Mr. Chintan Dave learned senior standing counsel waives service of notice of rule on behalf of the respondent. Having regard to the controversy involved in the present petition which lies in a very narrow compass the petition was taken up for final hearing today.2. This petition is directed against the common order dated 25-1-2017 passed by the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as the Appellate Tribunal) in Miscellaneous Applications No. C/ROA/10348/2016 and C/ROM/10349/2016 whereby the Appellate Tribunal rejected both the applications.3. Shorn of all unnecessary facts briefly stated the facts of the case are that a final assessment order/order-in-original came to be passed by the Assistant Commissioner of Customs Gujarat Pipavav Port Ltd. Pipavav (hereinafter referred to as the adjudicating authority) on 8-1-2017 denying the benefit of exemption Notification No. 21/2002 to the petitioner and charging the petitioner with Customs duty at the rate of 15% and directing the petitioner to pay the differential duty amounting to Rs. 57 38 518/-. The petitioner challenged the order of the adjudicating authority before the Commissioner of Customs (Appeals) Ahmedabad who by an order dated 31-3-2007 dismissed the appeal. The petitioner carried the matter in further appeal before the Appellate Tribunal in Appeal No. C/353/2007.3.1 It appears that in another instance the petitioner had imported a second consignment of coking coal a part whereof was sold to M/s. Maa Bhagwati Coke Pvt. Ltd. on high seas sale. On import both the petitioner and the aforesaid company filed bills of entry and claimed exemption contending that the ash content was lower than 12%. The claim of the petitioner was allowed and it was granted exemption however the claim of M/s. Maa Bhagwati Coke Pvt. Ltd. was rejected resulting in an appeal before the Appellate Tribunal Bearing No. C/352/2007. It is the case of the petitioner that both the appeals namely the appeal filed by M/s. Maa Bhagwati Coke Pvt. Ltd. and the appeal filed by the petitioner were cognate appeals and were listed and heard together from time to time by the Appellate Tribunal.3.2 It is further the case of the petitioner that on 23-2-2016 both the cognate appeals were listed before the Appellate Tribunal at Serial Nos. 15 and 16 and that on that date only the appeal of the petitioner was heard ex parte and dismissed on merits by the Appellate Tribunal whilst the cognate appeal was adjourned though both the appeals were listed together. In view of the fact that the appeal of the petitioner had been decided ex parte the petitioner made an application being Miscellaneous Application No. 10348 of 2016 before the Appellate Tribunal seeking recall of the order dated 23-2-2016 and restoration of Appeal No. C/353/2007 on various grounds which have been set out in detail in Paragraph 4.13 of the petition. The petitioner also moved an application being Miscellaneous Application No. 10349 of 2016 seeking rectification of the mistake in the order dated 23-2-2016 on various grounds which are set out in Paragraph 4.14 of the petition.3.3 Both the above miscellaneous applications came to be heard by the Appellate Tribunal on 20-1-2017 whereafter the petitioner filed its written submissions along with the judgments relied upon by it. By the common impugned order dated 25-1-2017 the Appellate Tribunal rejected both the applications of the petitioner which has given rise to the present petition.4. Mr. Mihir Joshi Senior Advocate learned counsel with Mr. Anuj Trivedi learned advocate for the petitioner submitted that the impugned order is a non-speaking and cryptic order and that the Appellate Tribunal has not dealt with the core and imperative issues raised by the petitioner. Inviting the attention of the Court to the impugned order it was pointed out that the Appellate Tribunal has observed that the appeal pertains to the year 2007 and could not have been kept pending for long despite the fact that a similar appeal of the very same year was adjourned while the petitioner's appeal was dismissed ex parte on merits. It was submitted that the Appellate Tribunal erred in observing that having decided the matter on merits it has become functus officio and cannot entertain an application for restoration. It was submitted that the attention of the Appellate Tribunal was drawn to the decision of the Supreme Court in the case of J.K. Synthetics Ltd. v. Collector of Central Excise 1996 (86) E.L.T. 472 (S.C.) which has been completely ignored by the Appellate Tribunal. Referring to the above decision it was pointed out that the Supreme Court has held that if in a given case it is established that the respondent was unable to appear before it for no fault of his own the ends of justice would clearly require that the ex parte order against him should be set aside. Not to do so on the ground of lack of power would be manifest injustice. It was submitted that the order dated 23-2-2016 passed by the Appellate Tribunal while deciding the appeal ex parte is based upon incorrect facts namely that the Appellate Tribunal has recorded that none appeared for the petitioner on 1-9-2015 despite the fact that the learned advocate for the petitioner was in fact present before the Appellate Tribunal and that on that date the appeal was listed at Serial No. 12 and at the time of hearing the colleague of the advocate had sought for a pass over. Subsequently though the advocate for the petitioner was present two other matters at Serial Nos. 17 and 22 that is E/1269/2003 and ST/235/2010 respectively were heard by the Appellate Tribunal extensively till the end of working hours. Therefore due to paucity of time the appeal was not called out again. It was submitted that though the advocate was present before the Appellate Tribunal merely because he did not get his presence marked with the Bench Clerk the order-sheet reflected that none appeared for the petitioner. It was submitted that the finding recorded by the Appellate Tribunal that the learned advocate for the petitioner was not present on 18-11-2015 is also incorrect inasmuch as in consonance with the practice of the Appellate Tribunal the advocate for the petitioner had prior to the date of hearing requested for an adjournment vide letter dated 31-10-2015 addressed to the Assistant Registrar which letter was delivered on 5-11-2015. However it appears that the letter was not placed on the record/file of the Appellate Tribunal and hence the order-sheet did not reflect the appearance on behalf of the petitioner. It was submitted that insofar as nonappearance of the learned advocate for the petitioner on 23-2-2016 is concerned the learned advocate appearing on behalf of the petitioner was wrongly informed that the Bench of the Appellate Tribunal was unavailable and hence he was appearing before the High Court. However upon becoming aware that the Appellate Tribunal was presiding on the said date the learned advocate rushed and reached the Appellate Tribunal by 12:20 p.m. however the Appellate Tribunal unexpectedly rose at 12:00 pm. and the advocate was unable to mention the appeal. It was urged that cognate Appeal No. C/352/2007 wherein identical issues were raised was listed from time to time together with the present appeal and that the appeal of the petitioner was listed at Serial No. 16 and the cognate appeal was listed at Serial No. 15. However the appeal of the petitioner was dismissed while the cognate appeal was adjourned. It was submitted that the absence of the learned advocate for the petitioner was bona fide unintentional and inadvertent and as there was sufficient and genuine reason the Tribunal was not justified in not recalling the ex parte order dated 23-2-2016. It was accordingly urged that the impugned order dated 25-1-2017 deserves to be quashed and set aside and the application filed by the petitioner for recalling the earlier order dated 23-2-2016 deserves to be allowed.5. On the other hand Mr. Chintan Dave learned senior standing counsel for the respondent reiterated the contents of the affidavit in reply filed on behalf of the respondents and adopted the findings recorded by the Appellate Tribunal and submitted that no case is made out so as to warrant interference.6. A perusal of the impugned order dated 25-1-2017 reveals that what has weighed with the Appellate Tribunal while rejecting the application for recalling of the earlier order and restoring the appeal is that the record revealed that the learned advocate for the appellant was continuously not present on three occasions i.e. on 1-9-2015 18-11-2015 and 23-2-2016. According to the Appellate Tribunal the continuous absence of the appellant and their representative during the hearing would not grant them any basic right of restoration of the appeal especially so when the Bench of the Tribunal consisting of the President and the Member (Technical) had arrived at a reasoned decision vide order dated 23-2-2016. The Appellate Tribunal has also observed that once the matter has been decided on merits the Tribunal becomes functus officio and cannot entertain an application for restoration of the appeal. On the basis of the above reasoning the Appellate Tribunal has rejected the application for restoration filed by the applicant.7. Insofar as the last finding recorded by the Appellate Tribunal viz. that it becomes functus officio and cannot entertain an application for restoration of appeal is concerned the same is clearly contradictory to the principles enunciated by the Supreme Court in J.K. Synthetics Ltd. v. Collector of Central Excise (supra) wherein it has been held thus : -5. Rule 20 of the CEGAT (Procedure) Rules deals with cases where the appellant has defaulted. Rule 21 empowers CEGAT to hear appeals ex parte. The fact that Rule 21 does not expressly state that an order on an appeal heard and disposed of ex parte can be set aside on sufficient cause for the absence or the respondent being shown does not mean that CEGAT has on power to do so. Rule 41 gives CEGAT wide powers to make such orders or give such directions as might be necessary or expedient to give effect or in relation to its order or to prevent abuse of its process or most importantly to secure the ends of justice.6. If in a given case it is established that the respondent was unable to appear before it for no fault of his own the ends of justice would clearly require that the ex parte order against him should be set aside. Not to do go on the ground of lack of power would be manifest injustice. Quite apart from the inherent power that every tribunal and court constituted to do justice has in this respect CEGAT is clothed with express power under Rule 41 to make such order as is necessary to secure the ends of justice. CEGAT has. therefore the power to set aside an order passed ex parte against the respondent before it if it is found that the respondent had for sufficient cause been unable to appear.7. It is for CEGAT consider in every such case whether the respondent who applies for recall of the ex parte order against him had sufficient cause for remaining absent when it was passed and if it is established to the satisfaction of CEGAT that there was sufficient cause CEGAT must set aside the ex parte order restore the appeal to its file and hear it afresh on merits.8. On the facts of the present case we think it proper to allow the appellants' application to CEGAT for setting aside the ex parte order against it ourselves.9. The appeal is allowed. The order under appeal is set aside. The application of the appellant for recalling the order dated 31st August 1987 passed by CEGAT ex parte against it is allowed. The appeal (No. 590/84C) before CEGAT is restored to its file and shall be heard and disposed of on merits.8. Thus the Supreme Court has clearly held that the Appellate Tribunal is clothed with express power under Rule 41 of the CEGAT (Procedure) Rules [now called the Customs Excise and Service Tax Appellate Tribunal (Procedure) Rules 1982] to make such order as is necessary to secure the ends of justice and therefore has the power to set aside an order passed ex parte against the respondent before it if it is found that the respondent had for sufficient cause been unable to appear.9. Insofar as the other grounds on which the application has been rejected are concerned one of the grounds is that the learned advocate for the petitioner had remained consistently absent whereas the learned advocate for the petitioner has pointed out the relevant facts which indicate that the aforesaid observations made by the Appellate Tribunal regarding the absence of the learned advocate for the petitioner during the course of hearing are incorrect.10. What has mostly weighed with the Appellate Tribunal while rejecting the application for recalling the earlier order is that the Bench comprising of the President and the Member (Technical) had arrived at a reasoned decision dated 23-2-2016. In this regard a perusal of the ex parte order dated 23-2-2016 passed by the Appellate Tribunal reveals that in the first paragraph it has recorded that there was no appearance on behalf of the appellant on the last two occasions and that the appeal was being taken up for disposal on the basis of records. In the second and third paragraphs the facts of the case have been briefly reproduced. In the fourth paragraph the Appellate Tribunal has recorded that it has heard the authorised representative who has reiterated the findings of the Commissioner (Appeals) in the impugned order in appeal. In Paragraph 5 the Appellate Tribunal has by and large reproduced the observations made by the adjudicating authority in the order-in-original dated 8-1-2017. In Paragraph 6 the Appellate Tribunal has reproduced the observations made by the Commissioner (Appeals) in the order-in-appeal and in the last paragraph has merely observed that in the above analysis it found that the impugned orders are unassailable in the facts and circumstances of the case. In the entire order there is not even a sentence discussing the merits of the appeal preferred by the petitioner. There is no reference to any ground raised by the petitioner in the appeal memorandum or any independent finding of the Appellate Tribunal. The Appellate Tribunal has merely reproduced extracts of the order-in-original and the order-in-appeal and has upheld the same stating that the impugned orders are unassailable. Though the Appellate Tribunal has used the expression in view of the above analysis there is no analysis worth the name reflected in the said order. Clearly therefore the order dated 23-2-2016 passed by the Appellate Tribunal is a non-reasoned and non-speaking one. The observation made by the Appellate Tribunal in the impugned order to the effect that the Bench comprising of the President and the Member (Technical) had arrived at a reasoned decision dated 23-2-2016 is therefore not borne out from the record.11. In the light of the law laid down by the Supreme Court in the case of J.K. Synthetics Ltd. v. Collector of Central Excise (supra) wherein the Supreme Court has held that the fact that Rule 21 does not expressly state that an order on an appeal heard and disposed of ex parte can be set aside on sufficient cause for the absence of the respondent being shown does not mean that CEGAT has no power to do so. Rule 41 gives CEGAT wide powers to make such orders or give such directions as might be necessary or expedient to give effect or in relation to its order or to prevent abuse of its process or most importantly to secure the ends of justice. The Court has held that CEGAT is clothed with express power under Rule 41 to make such order as is necessary to secure the ends of justice and therefore has the power to set aside an order passed ex parte against the respondent before it if it is found that the respondent had for sufficient cause been unable to appear.12. Having regard to the averments made in the memorandum of petition as well as in the application filed before the Appellate Tribunal the Court is of the view that the petitioner had made out sufficient cause for not remaining present when the order dated 23-2-2016 was passed and hence the Appellate Tribunal was not justified in not recalling its earlier order and restoring the appeal preferred by the petitioner.13. In the above view of the matter instead of remitting the matter to the Appellate Tribunal to once again consider the application for recalling of the order dated 23-2-2016 and restoration of the appeal in the facts of the present case the Court is of the view that sufficient cause has been made out by the petitioner for not remaining present before the Appellate Tribunal either personally or through its representative on the date when the ex parte order came to be passed.14. The petition therefore succeeds and is accordingly allowed. The impugned order dated 25-1-2017 passed by the Appellate Tribunal is hereby quashed and set aside. Miscellaneous Application No. C/ROA/10348/2016 is hereby allowed. The order dated 23-2-2016 passed by the Appellate Tribunal in Appeal No. C/353/2007 is hereby recalled and the appeal is restored to the file of the Appellate Tribunal which shall be heard and disposed of on merits. In the light of the fact that the order dated 23-2-2016 has been recalled it is not necessary to enter into the merits of the impugned order insofar as the application for rectification of mistake is concerned. It is clarified that the Court has not expressed an opinion on the merits of the appeal. Rule is made absolute accordingly with no order as to costs.Petition allowed.